CLE Materials

Renaissance Weekend Materials, February 3, 2018

The information below is provided for attendees of the Hilton Head Bar Association CLEs and is NOT intended as legal advice from this association or any of its speakers. Should you need legal advice, please consult with a licensed attorney.

Johnny Peace, Esquire: ERISA and your Personal Injury Practice: Benefit Claims and Subrogation Issues

WORKING EFFECTIVELY WITH SUBROGATION, REIMBURSEMENTS, AND LIENS.

By: John Robert Peace, Esq. John Robert Peace, P.A.
PO Box 8087
Greenville, SC 29604-8087
Ph- (864) 298-0500
Fax- (864) 271-3130
John@PeaceLawFirm.com

Introduction

Plaintiffs personal injury claims give rise to a variety of potentially conflicting claims to the proceeds of the Plaintiffs recove1y. In addition to the Plaintiff herself, medical providers, ERISA plans, health and disability insurers, governmental payors (both federal and state), and Workers Compensation caniers may have valid claims to funds obtained in the course of a personal injury claim.
On March 18, 2005, the Ethics Advisory Committee issued Opinion 05-08 to address the dilemma faced by a personal injmy attorney facing conflicting claims to personal injury proceeds by the attorney's client and the client's health insurance carrier's subrogation claim. A copy of Opinion 05-08 is attached as an Exhibit hereto.
Further complicating matters, theses claims arise under a wide variety of law and equity, both state and federal. The personal injmy attorney needs to be familiar with these areas in order to represent her clients' interests effectively. Moreover, failure to address some liens/reimbursement claims can cause financial losses to the client, the attorney, or both. This article and lecture arc intended to be an introduction to the subrogation, reimbursement, and lien issues that arise in personal injmy practice.
The several bodies of law governing such issues are subject to change, and conflicts

between applicable laws further create a tangle of apparently conflicting duties and obligations. As discussed below, the personal injmy attorneys may need to seek futthcr advice from other attorneys in dealing with many of these complex issues.
II.The South Carolina Rules of Professional Conduct.
As a threshold point, the Rules of Professional Conduct outline the attorney's duties to the client and others regarding personal injury proceeds. The lawyer owes a duty to clients and others regarding "Safekeeping of Property" (Rule 1.15) and Financial Recordkceping, Rule 417, SCACR.
Rule of Professional Conduct 1.15 addresses the Safekeeping of Property:

A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kept in a separate account maintained in the state where the lawyer's office is situated, or elsewhere with the consent of the client or third person. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of six years after termination of the representation. A lawyer shall comply with Ruic 417, SCACR.

Rule 407, SCACR, Rules of Prof.Conduct, Rule 1.15 (bold, italics, & underline added).

Rule 417 governs "FINANCIAL RECORDKEEPING" and requires interalia that:

(a) A lawyer who practices in this state shall maintain current financial records as provided in this rnle, and shall retain the following records for a period of six
(6)years after termination of the representation:

receipt and disbursement journals containing a record of deposits to and withdrawals from bank accounts which concern or affect the lawyer's practice oflaw, specifically identifying the date, source, and description of each item deposited, as well as the date, payee and purpose of each disbursement;

(2)ledger records for all trust accounts required by Rule 1.15 of the Rules of Professional Conduct, showing, for each separate trust client or beneficiary, the source of all funds deposited, the names of all persons for whom the funds are or were held, the amount of such funds, the descriptions

and amounts of charges or withdrawals, and the names of all persons to whom such funds were disbursed;

copies of retainer and compensation agreements with clients as required by Ruic 1.5 of the Rules of Professional Conduct;
copies of accountings to clients or third persons showing the disbursement of funds to them or on their behalf;
copies of bills for legal fees and expenses rendered to clients;
copies of records showing disbursements on behalf of clients;
checkbook registers or check stubs, bank statements, records of deposit, and prenumbered canceled checks or their equivalent;
copies of monthly reconciliations of the lawyer's ttust accounts with the statements received from the financial institutions; and
copies of those portions of clients' files that are reasonably necessary for a complete understanding of the financial transactions pertaining to them.

Rule 417, SCACR (bold added). Failure to comply with these Rules can imperil an attorney's license to practice and can expose the attorney to both criminal and civil penalties.
Rule 1.15(d) recognizes the attorney's duty to communicate with clients and third parties that may have an interest in the funds held in ttust:

Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this rule or otherwise pennitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such prope1ty.

Rule 407, SCACR, Rules of Prof.Conduct, Rule 1.15. Moreover, in the event of conflicting claims to funds held in trnst, rnlc 1.15 fu1thcr provides that:

When in the course of representation a lawyer is in possession of property in which two or more persons (one of whom may be the lawyer) claim interests, the property shall be kept separate by the lawyer until the dispute is resolved.

The lawyer shall promptly distribute all portions of the property as to which the interests are not in dispute.
Rule 407, SCACR, Rules of Prof.Conduct, Rule 1.15.

III.Medical Providers Liens, Assignments, and Letters of Protection.
In many cases, medical providers obtain a client's signature on a document which purports to create a lien, assignment, or other right ofreimbursemcnt from the client's personal injmy recovery. Medical providers may also provide copies of their bills stamped with a notice that "Benefits Assigned" or similar language. As a practical matter, medical providers will likewise often provide a copy of such assignment documentation along with the treatment records and medical bills when the attorney requests them. Where an attorney has notice of such an assignment or lien, then the party asserting the assignment or lien is likely a "person with an interest in" the funds in the attorney's trust account, per Rule 1.15.

The attorney and/or client may actually issue an assignment against the personal injury recovery directly to the medical provider, as consideration for medical treatment. In such cases, the client/patient gets the benefit of immediate medical treatment. The provider assumes the risk that the client may not make a sufficiently large recove1y to pay the provider's entire bill. On the other hand, the provider will likely recover a larger share of the provider's bill under a letter of protection than the provider might have received under Medicaid, Medicare, and/or group health coverages (if available). In such cases, the attorney (and/or client) is primarily liable to the provider for ensuring that the provider's lien is paid from the recovery.

IV.State Law on Health Insurance Subrogation Claims
S.C. Code§ 38-71-190 governs "Subrogation ofinsurcr to insurcd's rights against third
party":

Any policy or contract of accident and health insurance issued in this State may include provision for subrogation by the insurer to the insured's right of recovery against a liable third party for not more than the amount of insurance benefits that the insurer has paid previously in relation to the insurcd's injury by the liable third party. If the director or his designee, upon being petitioned by the insured, determines that the exercise of subrogation by an insurer is inequitable and commits an injustice to the insured, subrogation is not allowed. Attorneys' fees and costs must be paid by the insurer from the amounts recovered. This determination by the director or his designee may be appealed to the Administrative Law Judge Division as provided by law in accordance with Section 38-3-210.

S.C. Code§ 38-71-190.

V.S.C. Automobile Insurance: Title 33, Chapter 77.
South Carolina's Title 33, Chapter 77 deals with Automobile Insurance. Chapter 77 precludes subrogation and assigmnent of benefits payable under various types of automobile insurance coverages in South Carolina.
Regarding minimum limits Uninsured Motorist (UM) benefits, S.C. Code § 38-77-150 prohibits "subrogation and assignment of benefits", except in the unlikely event that "Benefits paid pursuant to this section are subject to subrogation and assignment if an uninsured motorist has selected the option to be uninsured by paying the fee pursuant to Section 56- 10-510." (bold added).

S.C. Code§ 38-77-160 precludes "subrogation and assignment" regarding "Additional uninsured motorist coverage; underinsured motorist coverage":
Automobile insurance carriers shall offer, at the option of the insured, uninsured motorist coverage up to the limits of the insured's liability coverage in addition to the mandato1y coverage prescribed by Section 38-77- 150. Such carriers shall also offer, at the option of the insured, underinsured motorist coverage up to the limits of the insured liability coverage to provide coverage in the event that damages are sustained in excess of the liability limits carried by an at-fault insured or underinsured motorist or in excess of any damages cap or limitation imposed by statute. If, however, an insured or named insured is protected by uninsured or underinsured motorist coverage in excess of the basic limits, the policy shall provide that the insured or named insured is protected only to the extent of the coverage he has on the vehicle involved in the accident. If none of the insured's or named insurcd's vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with the excess or underinsured coverage. Benefits paid pursuant to this section are not subject to subrogation and assignment.

(bold added).

Regarding "medpay" or "personal inju1y protection" (PIP) no-fault automobile coverages,

S.C. Code§ 38-77-144 precludes subrogation and assignment of PIP benefits:

There is no personal injury protection (PIP) coverage mandated under the
automobile insurance laws of this State. Any reference to personal injury protection in Title 38 or 56 or elsewhere is deleted. If an insurer sells no-fault insurance coverage which provides personal injury protection, medical payment coverage, or economic loss coverage, the coverage shall not be assigned or subrogated and is not subject to a setoff.

S.C. Code§ 38-77-144 (bold & underline added).

VI.Medicare.
42 C.F.R., Patt 411, provides for "Exclusions from Medicare and Limitations on Medicare Payment". In particular, "[42 U.S.C.] Section 1862(b)(2)(A)(ii) of the Act precludes Medicare payment for services to the extent that payment has been made or can reasonably be expected to be made under any of the following:
(I)Workers' compensation.

Liability insurance.
No-fault insurance.

42 CFR § 411.50 (bold added). Nonetheless, Medicare often makes a "conditional payment" for medical treatment, even though other insurance may apply, "because the intermedimy or carrier did not know that the other coverage existed." 42 CFR § 411.50. Under these regulations:
Primary payer means, when used in the context in which Medicare is the secondary payer, any entity that is or was required or responsible to make payment with respect to an item or service (or any portion thereof) under a primary plan. These entities include, but are not limited to, insurers or self insurers, third party administrators, and all employers that sponsor or contribute to group health plans or large group health plans.

42 CFR § 411.50 (bold & underline added). In the personal injmy context, recoveries from Primary Payors (i.e., automobile (or other liability) insurance carriers, including undcrinsured motorist and/or medpay/PIP coverages) are subject to reimbursement claims by Medicare.

Medicare reimbursement is governed by 42 C.F.R. § 411.24, entitled "Recovery of Conditional Payments." Sub-section (b) provides that: Right to initiate recovery. CMS may initiate recove1y as soon as it learns that payment has been made or could be made under workers' compensation, any liability or no-fault insurance, or an employer group health plan. (bold & underline added). Sub-section (g) further provides that Medicare may
Recovery from parties that receive primary payment. CMS has a right of action to recover its payments from any entity, including a beneficiaiy, provider, supplier, physician, attomey, State agency or private insurer that has received a primary payment.
(bold & underline added).

The most common problem in handling Medicare liens is the length of time to obtain the final lien amount from the applicable Medicare contractor. In South Carolina, the Centers for Medicare and Medicaid Services perfmm collection services for both types of governmental payors. Other entities may also be licensed Medicare contractors for purposes of both paying Medicare benefits and seeking recovery of Medicare liens. A list of contacts for both Medicare & Medicaid contractors/entities follows the Medicaid section below.

VII.Medicaid.
The Medicaid program, enacted as Title XIX of the Social Security Act, 42 U.S.C. §1396a, et seq., provides for a federal-state partnership to share the cost of providing medical services to specified individuals. To participate, a state must designate a single state agency to administer the state Medicaid plan. 42 U.S.C. § 1396a(a)(5). The State Health and Human Services Finance Commission, which was created by state statute, S.C.Code Ann. § 44-6-10, et seq. (Law Co-op. 1976), is designated as the single state agency in South Carolina. See Anco, Inc. v. State Health and Human Services Finance Co111'11, 300 S.C. 432,435, 388 S.E.2d 780, 782(1989).

S.C. Code §43-7-440 empowers the SC DHHS Finance Commission to enforce Medicaid liens. Under sub-section (A), "the Commission, to enforce its assignment or subrogation rights, may take any one, or any combination of, the following actions":
(!) intervene or join in an action or proceeding brought by the applicant or recipient against any third party, or private insurer, in state or federal court.

commence and prosecute legal proceedings against any third party or private insurer who may be liable to any applicant or recipient in state or fedeml court, either alone or in conjunction with the applicant or recipient, his guardian, personal representative of his estate, dependents, or survivors;
commence and prosecute legal proceedings against any third party or private insurer who may be liable to an applicant or recipient, or his guardian, personal representative of his estate, dependents, or survivors;

(4)commence and prosecute legal proceedings against any applicant or recipient;

settle and compromise any amount due to the State Health and Human Services Finance Commission under its assignment and subrogation rights. Provided, further, any representative or attorney retained by an applicant or recipient shall not be co11sidered liable to State Health and H11ma11 Services Fi11a11ce Commissio11 for im,,roper settleme11t, compromise or disbursement of [imds unless he has written notice of State Health and Human Services Finance Commission's assignment and subrogation rights prior to disbursement offimds;
reduce any amount due to the State Health and Human Services Finance Commission by twenty-five percent if the applicant or recipient has retained an attorney to pursue the applicant's or recipient's claim against a third party or private insurer, that amount to represent the State Health and Human

Services Finance Commission's share of attorney's fees paid by the applicant or recipient. Additionally, the State Health and Human Services Finance Commission may, in its discretion, share in other costs of litigation by reducing the amount due it by a percentage of those costs, the percentage calculated by dividing the amount due the State Health and Human Services Finance Commission by the total settlement received from the third party or private insurer. Provided, further, any representative or attorney retained by an applicant or recipient shall not be considered liable to State Health and Human Services Finance Commission for improper settlement, compromise, or disbursement of funds unless he has written notice by certified mail of State Health and Human Services Finance Commission's assignment and subrogation rights prior to disbursement of funds.
(bold, italics, & underline added). Sub-section (D) further provides that:

The assignment and subrogation rights of the Commission are superior to any right of reimbursement, subrogation, or indemnity of any third party or recipient. Provided, further, any representative or attorney retained by an applicant or recipient shall not be considered liable to State Health and Human Services Finance Commission for improper settlement, compromise, or disbursement of funds unless he has written notice of State Health and Human Services Finance Commission's assignment and subrogation rights prior to disbursement of funds.(bold & underline added).

Under federal regulations, medical providers are not allowed to bill the patient the balance of the providers bill after filing for Medicaid payment:

A State plan must provide that the Medicaid agency must limit participation in the Medicaid program to providers who accept, as payment in full, the amounts paid by the agency plus any deductible, coinsurance or copayment required by the plan to be paid by the individual. However, the provider may not deny services to any eligible individual on account of the individual's inability to pay the cost sharing amount imposed by the plan in accordance with § 431.55(g) or§ 447.53. The previous sentence does not apply to an individual who is able to pay. An individual's inability to pay does not eliminate his or her liability for the cost sharing charge.

42 C.F.R. §447.15 (bold & underline added). Accordingly, the provider may not bill the Medicaid recipient for any procedures covered by Medicaid or for any fees over and above those allowed by Medicaid.

VIII.ERISA Plan's Subrogation, Reimbursement, and Liens.
The federal Employee Retirement and hlcome Security Act (ERISA) governs most group benefit plan claims where the plan was established by a private employer to provide benefits for employees. ERISA defines such employee welfare benefit plans as follows:
(1) The terms "employee welfare benefit plan" and "welfare plan" mean any plan,
fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment ...

29 USCA § 1002 (bold & underline added).
Subrogation/Reimbursement claims by ERISA Plans are among the most common problems facing the personal injmy attorney. ERISA Plans may assert subrogation and/or
/reimbursement claims to recover amounts paid to, or on behalf of, plan participants under medical plans, disability plans, and/or under other plans containing subrogation/reimbursement provisions. Group Disability and/or Group Health plans often require claimants to sign a separate Reimbursement Agreement when the Plan awards benefits, whereby the claimant specifically promises to repay the Plan from any third party recove1y.
An attorney does not have an affinnative duty to contact the ERISA plan (or other health or disability plan/insurer) regarding the existence of a subrogation/reimbursement claim. If the attorney has actual notice of such a lien or claim, however, Ruic of Professional Conduct 1.15 requires the attorney to hold the funds in trust until the alleged lien dispute is resolved.

After notice of a potential ERISA Plan lien, the attorney should first (and immediately) request a complete copy of the Plan document and any other documents on which the Plan bases its claim for reimbursement. Such requests to the Plan should be based on the ERISA Civil Enforcement Statute, 29 U.S.C. §1132 and the Claims Procedure CFR section (29 C.F.R. Section 2560.503-1). Such a request should include copies of any reimbursement agreements signed by the Plan participant/client.
If the Plan "fails or refuses to comply with a request for any information which such administrator is required by this subchaptcr to furnish to a participant or beneficiary ... .J2y
mailing the material requested to the last known address of the requesting participant or

bcneficiaiy within 30 days after such request may in the court's discretion be personally liable to

such participant or bencficia1y in the amount of up to $100 a day from the date of such failure or

refusal, and the court may in its discretion order such other relief as it deems proper." 29

U.S.C.A. § l 132(c)(l)(bold & underline added).

After receiving the Plan, the attorney should review the entire Plan document (as well as any Summary Plan Document, Reimbursement Agreements, etc.) to determine whether the alleged lien reaches some (or all) of the client's recovery. ERISA does not mandate that Plans contain any subrogation/reimbursement provision. Therefore, the attorney must review the Plan document carcfillly to determine the existence and scope of the subrogation provision. If the client will make a recove1y from her own Uninsured Motorist (UM) or Underinsurcd Motorist (UIM) coverage, then the attorney should likewise read the Plan document to determine whether the subrogation provision reaches such first party coverages. As a general matter, "Any ambiguity in an ERISA plan 'is construed against the drafter of the plan, and it is construed in accordance with the reasonable expectations of the insured.' Bynum v. Cigna Healthcare, Inc., 287 F.3d 305, 313-14 (4th Cir.2002); Gallagherv. Reliance Standard Life Ins. Co., 305 F.3d 264, 269 (4th Cir. 2002). Therefore, the attorney must review the Plan document, along with the SPD and other relevant documents, in their entirety.

To further complicate the evaluation of BRISA Plan lien claims, the attorney must also determine whether state law will apply to the Plan's claims. As discussed above, South Carolina law contains procedures for decreasing (or even eliminating) health insurance subrogation in some circumstances. Moreover, UM and UIM coverages are statutorily exempt from "subrogation and assignment" under Title 33, Chapter 77. The key question will be whether BRISA preempts these state laws. While a thorough discussion of ERISA preemption is beyond the scope of this article, the following provides a rough outline of the applicable law.
According to ERISA §514(a), BRISA shall "supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan... " 29 U.S.C. §l 144(a).
However, the "Savings Clause" fmther provides that "Except as provided in subparagraph (B) [the dcemer clause], nothing in this subchaptcr shall be constrned to exempt or relieve any person from any law of any State which regulates insurance, banking, or securities." 29 U.S.C.
§l 144(b)(2)(A). Finally, the "Deemer Clause" provides that:

Neither an employee benefit plan described in section 1003(a) of this title, which is not exempt under section 1003(b) of this title (other than a plan established primarily for the pmpose of providing death benefits), nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer, bank, !Just company, or investment company or to be engaged in the business of insurance or banking for purposes of any law of any State purporting to regulate insurance companies, insurance contracts, banks, trust companies, or investment companies.

29 U.S.C.A. § 1144 (bold & underline added). The U.S. Supreme Court has noted that although
"that these provisions are not a model of legislative drafting. Their operation is nevertheless discernible." FMC Co,p. v. Holliday, 498 U.S. 52, 58, 111 S.Ct. 403, 407 (1990)
The FMC Court analyzed ERISA §514 as follows:

The pre-emption clause is conspicuous for its breadth. It establishes as an area of exclusive federal concern the subject of every state law that "relate[s] to" an employee benefit plan governed by ERISA. The saving clause returns to the States the power to enforce those state laws that "regulat(el insurance," except as provided in the deemer clause. Under the deemer clause, an employee benefit plan governed by ERISA shall not be "deemed" an insurance company, an insurer, or engaged in the business of insurance for pmposes of state laws "purporting to regulate" insurance companies or insurance contracts.

FMC Co,p. v. Holliday, 498 U.S. 52, 58, 111 S.Ct. 403,407 (1990)(bold & underline added). From this tangle of legislation, a few basic rules become clear.
First, a self-funded ERISA Plan is not bound by state laws purporting to regulate the business of insurance. Under the "deemer clause", the Plan itself cannot be "deemed" an insurer or in the business of insurance, and the application of state insurance laws to the ERISA Plan are preempted. Therefore, a self-funded ERISA Plan's subrogation/reimbursement lien claim must be evaluated on the terms of the Plan document (and any reimbursement agreement, SPD, etc.) alone.
Second, if the ERISA Plan provides benefits by way of any insurance policy, then the insurer is subject to state law governing the business of insurance under the "savings clause". Accordingly, an insured ERISA Plan may not assert a subrogation claim against UM or UIM benefits, because UM and UIM benefits are not "subject to subrogation or assignment" under state law (see above). Moreover, an insured ERISA Plan is also subject to S.C. Code§ 38-71- 190 governing "Subrogation of insurer to insured's rights against third paity".
As a practical matter, most Plans (and their counsel) are aware of these preemption issues. After ascertaining the funding method of a particular plan, the parties can usually agree as to whether state law will apply to the Plan's subrogation claim. Likewise, the language of the Plan document may contain ambiguities or other issues that impact negotiation of lien claims. In most cases, BRISA Plan liens can be negotiated by well-infonned parties without the need for formal litigation.
As a final note, where a Plan participant is still covered by the medical Plan or LTD Plan, the Plan may discontinue payment of subsequent benefits until the alleged lien issue is resolved. Therefore, resolution of Plan lien claims can have great importance for the client, well beyond the resolution of the personal injury claim itself.
IX.Workers Compensation Liens.
In some cases, an injured person maybe eligible for Workers Compensation benefits, in addition to a right of recovery against a liable third party. S.C. Code § 42-1-550 provides that:
When an employee, his personal representative or other person may have a right to recover damages for injury, loss of service or death from any person other than the employer, he may institute an action at law against such third person before an award is made under this Title and prosecute it to its final determination.
(bold & underline added). The time to evaluate the third patty action is the beginning of the case, however, because failure to follow the Workers Compensation provisions regarding third party actions will waive the workers compensation claim. A full discussion of these issues is beyond the scope of this article.
S.C. Code § 42- l-560(b) provides that:

In such case the carrier shall have a lien on the proceeds of any recovery from the third party whether by judgment, settlement or othe1wisc, to the extent of the total amount of compensation, including medical and other expenses, paid, or to be paid by such carrier, less the reasonable and necessary expenses, including attorney fees, incurred in effecting the recovery, and to the extent the recovery shall be deemed to be for the benefit of the carrier. Attomey fees owed and payable by the carrier to the attorneys effecting the recovelJ' shall be set by the Commission but shall not exceed one third of the total claim amount paid by the carrier to the injured employee.

(bold, italics, & underline added). Please note that S.C. Code § 42-l-560(b) further requires that "Notice of the commencement of the action shall be given within thirty days thereafter to the Industrial Commission, the employer and carrier upon a form prescribed by the Industrial Commission." (bold added). The required "Notice of Third Party Action Employee" is Workers Compensation Commission Form S-2. The Form S-2 is designed to give the Employer and WC Carrier notice of the third party action so that the Carrier can protect its
lien. All WCC forms can be accessed from the SC WCC website at www.wcc.state.sc.us.

Regarding the Carrier's right to approve the third party settlement, S.C. Code§ 42-l- 560(f) provides that:
The carrier shall not unreasonably refuse to approve a proposed compromise settlement with the third party. The injured employee or his dependents may make written application to the Industrial Commission for a finding that a proposed compromise settlement with the third party is reasonable and fair to all parties. If the Industrial Commission, after such inquiry as it deems necessaty, and after hearing if demanded by either the carrier, the injured employee or his dependents, finds the proposed settlement reasonable and fair, it shall be deemed to have been approved by the carrier.

(bold & underline added). The best course is to keep the WC Carrier informed of any negotiations in the third party action. The WC Carrier and the injured client can agree to any distribution of the third party proceeds. If they cannot agree, however, S.C. Code §42-l-560(f) provides a mechanism for the client to seek reduction of the WC Carrier's lien:
Notwithstanding other provisions of this item, where an employee or his representative enters into a settlement with or obtains a judgment upon trial from a third party in an amount less than the amount of the employee's estimated total damages, the commission may reduce the amount of the carrier's lien on the proceeds of such settlement in the proportion that such settlement or judgment bears to the commission's evaluation of the employee's total cognizable damages at law. Any such reduction shall be based on a determination by the commission that such reduction would be equitable to all parties concerned and serve the interests of justice.

SC Code § 42-1-560(f)(bold & underline added).

As a side note, if the injured worker does not commence the third party action, then pursuant to S.C. Code§ 42-l-560(c), the WC Carrier may assume and assert the third paity action by filing WCC Form S-3 "Entitlement to Right of Action". After filing suit, the Employer/Carrier then files a Form S-1 Notice of Third Party Action- Employer Carrier" to provide notice of the third paity action to both the injured employee and the SC WCC.
In handling personal injury cases, I have learned the value of the following "Practical Rules":
.Something is better than nothing.

More is better than less.

Sooner is better than later.

An ounce of prevention is worth a pound of cure.

Moreover, in most cases, the first three rules apply equally to both the client and the parties asserting various liens or reimbursement claims. By dealing with subrogation, lien, and/or reimbursement claims pro-actively, the personal injury attorney can provide great value and peace of mind for the client and resolve the reimbursement issues fairly and equitably.

Allen Freeman, Certified Divorce Financial Analyst: Divorce Financial Planning

Harry Goldberg, Esquire: mediation of medical malpractice cases

DAMAGE CAPS IN SOUTH CAROLINAPrivate Entity- See S.C. Code §15-32-220 3-YearSoL
Economic Damages are not capped.
Non-Economic Damages are capped pursuant to S.C. Code §15-32-220.
Per entity per claimant= $440,040 (started at $350,000)
All entities per claimant= $1,332,125 (sta1ied at $1,050,00)
The South Carolina Revenue and Fiscal Affairs Office calculates these figures each year. The 2017 calculation can be found here: http://rfa.sc.gov/files/2017%20Section%2015- 32-220%28F%29%20Noneconornic%20Damage%20Liability.pdf
If you can prove reckless, willful, or grossly negligent, behavior then there is no cap on non economic damages.
Per S.C. Code §15-32-210(2): "Claimant" means the person suffering personal injwy.
Per S.C. Code §15-32-220(C): In an action on a medical malpractice claim when final judgment is rendered against more than one health care institution, or more than one health care provider, or any combination thereof the limit of civil liability for noneconomic damages for each health care institution and each health care provider is limited to an amount not to exceed [$440,040] for each claimant, and the limit of civil liability for noneconomic damages for all health care institutions and health care providers is limited to an amount not to exceed [$1,332,125] for each claimant, except as provided in subsection (E).
Per S.C. Code § l 5-32-220(E): The limitations for noneconomic damages rendered against any health care provider or health care institution do not apply if the jury or court determines that the defendant was grossly negligent, willfiil, wanton, or reckless, and such conduct was the proximate cause of the claimant's noneconomic damages, or if the defendant has engaged in fraud or misrepresentation related to the claim, or if the defendant altered or destroyed medical records with the purpose of avoiding a claim or liability to the claimant.

Charitable Entity- See SC Code §33-56-180 3-Year SoL
Nursing Negligence= $300,000 Physician Negligence= $1.2 million
If the charitably entity's employee acted in a reckless, willful, or grossly negligent manner, then, the negligent individual can be sued is not protected by the Charitable Immunity Act.§ 33-56-lS0(A). In that situation, you can get punitive damages (under no situation can you get a punitive damages award under the SCTCA).

Governmental Entity- See S.C. Code §15-78-120 2-Year SoL
Nursing Negligence= $300,000 Physician Negligence = $1.2 million
These caps are "per occurrence."
Per S.C. Code §15-78-30(g): "Occurrence" means an unfolding sequence of events which proximately flow fi'om a single act of negligence.
Per S.C. Code§15-78-120(1)(3): No person may recover in any action or claim brought hereunder against any governmental entity and caused by the fort of any licensed physician or dentist, employed by a governmental entity and acting within the scope of his profession, a sum exceeding one million two hundred thousand dollars because of loss arising fi·om a single occurrence regardless of the number of agencies or political subdivisions involved.
Arguably, the non-economic damage do not apply, as S.C. Code §15-78-200 provides: "Exclusive and sole remedy for torts committed by employee of governmental entity while acting within scope of employee's official duty."
Notwithstanding any provision of law, this chapter, the 'South Carolina Tort Claims Act', is the exclusive and sole remedy for any fort committed by an employee ofa
governmental entity while acting within the scope of the employee's official duty.
BUT, it goes to say: "The provisions of this chapter establish limitations on and exemptions to the liability of the governmental entity and must be liberally construed in favor of limiting the liability of the governmental entity."

Federal Governmental Entity2-Year SoL
Claims only the benefit of the Non-Economic damages that are capped pursuant to S.C. Code§15-32-220 (see above for exceptions).

Wrongful Death:S.C. Code § 15-51-20. Beneficiaries of action for wrongful death; by whom brought. Every such action shall be for the benefit of the wife or husband and child or children of the person whose death shall have been so caused, and, if there be no such wife, husband, child or children, then for the benefit of the parent or parents, and if there be none such, then for the
benefit of the heirs of the person whose death shall have been so caused. Every such action shall be brought by or in the name of the executor or administrator of such person.

S.C. Code§ 15-51-40. Damages; amount and to whom payable,In every such action the jury may give damages, including exemplary damages when the wrongful act, neglect, or default was the result of recklessness, wilfulness, or malice, as they may think proportioned to the injury resulting from the death to the parties respectively for whom and for whose benefit such action shall be brought. The amount so recovered shall be divided among the before-mentioned parties in those shares as they would have been entitled to if the deceased had died lntestate and the amount recovered had been personal assets of his or her estate.

However, upon motion by either parent or any other party of potential interest based upon the decedent having died intestate, the probate court may deny or limit either or both parent's entitlement for a share of the proceeds if the court determines, by a preponderance of the evidence, that the parent or parents failed to reasonably provide support for the decedent as defined in Section 63-5-20 and did not otherwise provide for the needs of the decedent during his
or her minority.

DAMAGES CAPS: HELPFUL CASE LAW

ONE CAP PER OCCURANCEThe leading South Carolina case in determining what amounts to an "occurrence" under the Tort Claims Act is Boiter v. S. Carolina Dept. ofTransp., 393 S.C. 123, 712 S.E.2d 401 (2011) which held that independent and separate acts of negligence can create multiple layers of the applicable cap. The Court further held that each occurrence does not have to create a separate and distinct injury but can combine to result in a single injury. Id.at 133-34. 712 S.E.2d at 406.

The Supreme Court of South Carolina stated that "O]ust as in any tort action, a [Charitable Funds Act] plaintiff bears the burden of proof. If [the plaintiff] alleges multiple occurrences, that is, that there was more than one single act of negligence from which proximately flowed an unfolding sequence of events, she bears the burden of proving each occurrence." Chastain v. AnMed Health Foundation, 388 S.C. 170,174,694 S.E.2d 541, 543-44 (2010). "Occunence" is defined in the [To11 Claims Act] as "an unfolding sequence of events which proximately flow from a single act of negligence." S.C. Code Ann.§ 15-78-30(g) (2005).

WRONGFUL DEATH AND SURVIAL AS SEPRATE CLAIMSPreer v. Mims, 323 S.C. 516,521,476 S.E.2d 472, 474-75 (1996),
The South Carolina Supreme Court held that a "loss of conso1tium claim is an independent action, not derivative" and that the "right of the action does not accrue until the loss of the services, society and companionship of the spouse has actually occtmed, which has been defined as the point when the spouse sustained the injuries."

Wright v. Colleton County School Dist., 301 S.C. 282, 391 S.E.2d 564 (1990). South Carolina Supreme Court held that a loss of conso1tium claim is a cognizable "loss" as defined by, the South Carolina Tort Claims Act and recoverable separately from the underlying tort action.

Endres v. Greenville Hosp. System, 312 S.C. 64,439 S.E.2d 261 (1993).
The plaintiffs, parents of an injured minor child, brought claims, against a charitable hospital and its employee, on behalf of both the minor child and themselves individually. The claim on behalf of the minor child was for his resulting physical injuries. The claim on behalf of the parents was for the resulting medical bills that they obligated to pay. The defendant hospital contended that while the plaintiffs may have brought separate claims, there was only one "injury" as defined by the Charitable Immunity Act, and therefore one layer of the applicable cap ($200,000 at that time). The South Carolina Supreme Court disagreed holding that the "legislature did not define 'injury' for the Charitable Immunity Act" and when words are not statutorily defined they are to be given their "plain and ordinary meaning." The Cout1, citing Blacks Law Dictionary held that "'[i]njury' means 'any wrong or damage done to another, either in his person, rights, reputation, or property"' and found that there were different injuries for the different claimants and therefore two caps applied.

Williamson v. The South Carolina Insurance Reserve Fund, 2001 WL 35835128 (S.C. Com. Pl. 2001), reinforcing the holding of Endres that separate and cognizable injuries create multiple layers under a cap. Similar to Endres, in Williamson, the plaintiffs brought a malpractice action against a government hospital and its employees on behalf of their minor and for his injuries and individually for the related hospital bills. Plaintiffs argued that as a result of the two separate claims two layers of the Tort Claims Act cap ($1 million at the time) applied. Defendants claimed that only one cap applied. Id. Citing the Endres decision, Justice Beatty held that
"[b]ecause the loss sustained by each entity (the parents, and the child) are separately cognizable, each of the plaintiffs are entitled, as a matter of law, to have the caps applied separately for their losses. Id at p. 5. (emphasis added).

Order Re Defendants' Motion Concerning Limits on Potentially Recoverable Damages, Hoard v. Roper Hospital, Inc. 2005 WL 5601130 (S.C. Com. Pl. 2005) where Judge Mikell R.
Scarborough concurred with Judge Beatty's analysis and refused to limit the Charitable Immunities cap on damages as a matter of law.

CONSENT-TO-SETTLE AND HAMMER CLAUSES IN PROFESSIONAL LIABILITY INSURANCE POLICIESPresented by: Harry L. Goldberg
Circuit Court Civil Mediator and Arbitrator Finkel Law Firm, LLC
1201 Main Street, Suite 1800
Columbia, SC 29201
(803) 765-2935

Prior to settling a claim, many professional liability insurance policies require that an insurer obtain the consent of its insured. When an insured refuses to give their consent to a settlement recommended by the insurer, the insurer may believe they can invoke a professional liability policy's "hammer clause." However, this may depend on the exact language in the hammer clause and whether or not it contains some variation of the word "reasonableness." This issue has not yet been discussed in South Carolina; however, other courts have started to interpret when the hammer clause may be used against the insured.
In Security Ins. Co. of Hartford v. Schipporeit, Inc., the insurance policy at issue contained the following hammer clause with no reference to reasonableness:

The Company shall not settle any claim without the written consent of the named insured, except for claims involving alleged libel or slander on the part of the insured. If, however, the named insured shall refuse to consent to any settlement recommended by the Company, and shall continue litigation at the trial level or at the appellate level in connection with such claim, then the company's liability for that claim shall not exceed the amount for which the claim would have been settled plus the cost and expenses incurred with the Company's consent up to the date of such refusal to settle.

69 F.3d 1377, 1383 (7th Cir. 1995). The Seventh Circuit held that the language of the policy spoke for itself and "[i]f an insured is presented with an opportunity to dispose of a claim and the insurer recommends that the claim be resolved, the insured may refuse to accept the insurer's recommendation only at his peril. The risk of loss over and above the proposed settlement passes to the insured." Id.
However, where the consent-to-settle clause contained a reference to reasonableness, courts have imposed a requirement that the insured's refusal to settle must have been unreasonable for the insurer to utilize the hammer clause. In Freedman v. United Nat. Ins. Co., the hammer clause at issue stated:
[UNIC] shall ... not settle any CLAIM without the written consent of the NAMED INSURED which consent shall not be unreasonably withheld. If however, the NAMED INSURED refuses to consent to a settlement recommended by [UNIC] and elects to contest the CLAIM or continue legal proceedings in connection with such CLAIM, [UNIC's] liability for the CLAIM shall not exceed the amount for which the CLAIM could have been settled[.]
2011 WL 78I 9 I9, at * I (C.D. Cal. Mar. I, 2011) (emphasis added). The insured argued if an insured refuses to consent to a settlement, the insurer's liability for the claim is reduced only if the insured's refusal was unreasonable. Id. The insurer argued that regardless of whether the insured's withholding consent was reasonable; the insurer could limit their liability to the amount
of the rejected settlement offer. Id. The cou1t agreed with the insured. It held that the first sentence of the hammer clause allowed the insured to refuse to settle as long as doing so was reasonable and read the second sentence of the hammer clause to limit the insurer's liability to the amount of the rejected settlement offer only if that rejection by the insured was unreasonable. This is an important issue for all parties to know and understand prior to mediation. If a professional liability policy contains a hammer clause that has a reasonableness requirement, the insurer must evaluate whether an insured's refusal is reasonable in order to know whether they may properly invoke the hammer clause against the insured. It is valuable to the insured, insurer,
and mediator to understand their policy and the settlement landscape.

NATIONAL PRACTITIONERS DATA BANK
In 1986, the Health Care Quality Improvement Act (HCQIA) went into effect. A section of this law established the National Practitioner Data Hank (NPDB) which was a repository for reporting adverse actions of health care providers. The NPDB· was formed because Congress was under the impression that the quality of medical care in America was decreasing; they viewed this as a national problem. To address this issue, Congress wanted to encourage physicians to participate in meaningful peer review.
The intent if Congress in setting up the NPDB was to restrict the ability of incompetent practitioners from moving from state to state without having to disclose their previous malpractice payments and other adverse actions, .e.g., loss or restrictions on a license, loss of privileges, or loss of professional society memberships. The NPDB was a clearinghouse to collect and release information that was believed to be related to professional conduct and competence. This data would be available to entities involved in granting, or denying credentials and privileges to health care providers and to the appropriate licensing boards of the various states.
Under this law, reports must be submitted to the NPDB if a malpractice settlement or judgment payment is made for the benefit of a licensed physician; this includes residents and interns.
There is a dispute process available to the practitioner who has been reported but this process cannot be used to protest a payment or to appeal the underlying reasons for the reporting. It can only be used to dispute the factual accuracy of the report or claim the report was not submitted in accordance with the NPDB requirements. This written statement would be available to those entities allowed access to the NPDB reports.
According to an article in the New England Journal of Medicine, only 2 percent of patients injured by negligent care in a hospital file malpractice claims. (NEW England Journal of Medicine, Vol. 324, 1991 (370-6)) The elderly and the poor are even less likely to sue (Medical error: What do we know? What do we do? Jossey-Bass 2002). lf a malpractice case makes it to trial, there is a high likelihood, about 90%, for a defense verdict.
In a study of negligence cases in 2008 by the American Medical Association, they found that 65% of claims were dropped, dismissed, or withdrawn prior to trial. Settlements occurred in 27.5% of cases and only 5% were resolved at trial. Of the cases that made it to trial, the physician defendants won 90% of the time. (Carol K. Kane, Medical Liability Claim Frequency: A 2007-2008 Snapshot of Physicians)
Often, it is not the Defendant's liability which impedes settlement of the case; but rather, it is the prospect of a report to the NPDB. Of course, the Defendant still runs the risk of an adverse verdict at trial which also would be reported.

Barbara Seymour, Esquire: Ethics

Ethics and Discipline Update
Barbara M. Seymour Clawson and Staubes, LLC (800) 774-8242
barbara@cslaw.com
(01/22/2018)

Part III – Recent Rule Revisions, Proposals, and Ethics Advisory Opinions (p. 8)
Part IV – 2016-2017 Annual Report on Lawyer Discipline (p. 10)

Summaries of Disciplinary Opinions

Criminal Conduct

Matter of Pfeiffer. Lawyer assisted a client in perpetuating a commercial development re-lending scheme involving misrepresentations to investors, business partners, and South Carolina State agencies for several years. Lawyer pled guilty to two counts of securities fraud and one count of conspiracy. Lawyer was sentenced to ten years in prison, suspended to four years and two years of house arrest. Disbarment (retroactive) plus costs, by agreement. (Op.#27703, January 12, 2017)
Matter of McMaster. In 2013, Lawyer as arrested for DUI, failure to signal, and hit and run involving property damage. He was allowed to plead guilty to DUI and improper turn. In 2014, Lawyer was arrested for using a firearm while intoxicated, disorderly conduct, and property damage. He was allowed to plead guilty to unlawful carrying of a pistol. Thirty Month Suspension, retroactive, plus costs, LHL monitoring, and continuing psychiatric and medical treatment. (Op.#27697, January 11, 2017)
Matter of Farrell. Philadelphia Lawyer was convicted in the United States District Court for the District of Maryland of seven counts of money laundering, two counts of attempted tampering with official proceedings, and one count of attempted witness tampering. Disbarred, by agreement. (Op.#27733, August 23, 2017)
Matter of McAdams. Lawyer partnered with two others to perpetuate an investment scam. Lawyer used his position as an attorney to lure investors, then used funds received for personal expenses. Lawyer pled guilty to one count of conspiracy to commit wire fraud and was ordered to pay in excess of $3 million in restitution. Lawyer failed to respond to disciplinary inquiries. Disbarred, plus costs, by default. (Op.#27737, September 14, 2017)
Matter of Parrott. Lawyer pled guilty to third degree assault and battery after using his mobile phone to take a picture up a woman’s skirt in a grocery store. Lawyer’s disciplinary history included a four-month suspension in 1994 after his arrest for pulling down a woman’s bathing suit at the beach, the second such assault committed by Lawyer at the time. Nine-Month Suspension (not retroactive), plus two years of LHL monitoring, by agreement. (Op.#27736, September 14, 2017)

Neglect of Client Matters

Matter of McGurk. Lawyer represented a client in a PCR matter. PCR was denied, but the judge ruled that the client was entitled to a belated review of his direct appeal. Lawyer failed to file the notice of appeal or take any action on behalf of the client, in spite of two reminder letters from the Supreme Court. The client filed a pro se notice of appeal, but it was dismissed as a result of Lawyer’s failure to file proof of service. Lawyer claimed that he did not know he was supposed to

file a notice of appeal and that he thought the appellate defender would take over the case. Lawyer had previously received a public reprimand, an admonition, and three letters of caution. Six Month Suspension, by Agreement. (Op.#27717, May 11, 2017)

Matter of Bosnak. Lawyer represented a client in a probate matter and a federal wrongful death case. The wrongful death case was dismissed as a result of Lawyer’s failure to participate in discovery in spite of orders compelling him to do so. The client hired a new lawyer who attempted to obtain documents and deposition testimony from Lawyer. Lawyer repeatedly failed to cooperate, resulting in a contempt order from the probate court. In addition, Lawyer’s bank reported two instances of overdrafts of Lawyer’s trust account. Lawyer did not cooperate in the disciplinary investigation and was placed on interim suspension as a result. After notice of his suspension, Lawyer removed $6,000 of earned fees from his trust account in violation of his interim suspension order. One Year Definite Suspension, retroactive, plus costs and LEAPP, by agreement. (Op.#27713, April 9, 2017)
Matter of Smalls. Lawyer failed to pay court reporters for transcripts in five cases. Lawyer had previously entered into a deferred discipline agreement with the Commission on Lawyer Conduct in which he agreed to complete LEAPP Ethics School and Law Office Management School and maintain $1,000.00 in his operating account to cover client expenses such as court reporter invoices. Lawyer failed to comply with the deferred disciplinary agreement. Lawyer also failed to respond to disciplinary inquiries in several matters. Definite Suspension of 18 Months (retroactive), plus costs and LEAPP Ethics School, Trust Account School, Advertising School, and Law Office Management School, by agreement. (Op.#27741, October 4, 2017)

Misappropriation and Other Trust Account Violations

Matter of Jordan. Lawyer failed to honor fee sharing agreements with co-counsel in a number of cases and converted co-counsel’s portion to his own use. In some cases, he also misrepresented the status as pending or in litigation to co-counsel. Over the course of more than ten years, Lawyer and his staff made a number of serious accounting errors including miscalculating fees and paying fees twice; failing to properly account for funds transferred from one trust account to another; removing fees and costs from trust before funds were collected by the bank; failing to maintain the required account records; and, using funds in trust for one client to cover shortages in another client’s account. This matter involved two sets of formal charges. At the hearing on the first set of charges, Lawyer falsely asserted that he had taken steps to correct his accounting problems and that he was in compliance with his ethical obligations. In fact, at that time he was continuing to “steal fees from his co-counsel” and “lie” about the status of the cases. The Court found that Lawyer deliberately continued his shoddy recordkeeping to cover up his misappropriation. The Court rejected Lawyer’s claims that his violations were “merely technical” and that this was essentially a fee dispute between co-counsel. The Court held that the recordkeeping rule in RPC “protects lawyers who obey the rule because they always have detailed records to show how client funds and the funds of others were maintained and distributed. The recordkeeping provision also prevents lawyers who disobey the rule from claiming they made a simple mistake.” Disbarred. (Op.#27734, August 30, 2017)
Matter of Campbell. While employed as an associate at a law firm, Lawyer received a cashier’s check for a retainer fee with instructions from his boss to deposit it into the law firm trust account. When Lawyer attempted to deposit the check, the bank teller would not accept it because it was not made out correctly. Lawyer went to the client’s bank and had the cashier’s check reissued payable to himself, then he deposited it into his own account. Several months later, when the firm’s partners asked Lawyer where the funds were, he falsely stated that he didn’t know. When the firm learned of the misappropriation, Lawyer was fired. Lawyer neglected two additional

unrelated legal matters while he was employed by the firm and after he left. In one case, Lawyer failed to file a lawsuit in a property damage matter prior to the expiration of the statute of limitations. Instead of informing the client, Lawyer prepared a phony release and other documents, representing to the client that the matter had settled. Three Year Suspension, by default, plus restitution, costs, and LEAPP. The Court declined to apply the sanction retroactively to October 2015, when Lawyer was placed on interim suspension for failing to cooperate in the disciplinary investigation. (Op.#27735, August 30, 2017)

Litigation Misconduct

Matter of Nolan. Lawyer is licensed to practice law in Arkansas, but not South Carolina. In preparing for trademark litigation, Lawyer sent his private investigators to visit the defendant's business operations in South Carolina to gather evidence. The investigators posed as customers and made false statements to employees to induce them into making statements about the company's products. The investigators tape-recorded the conversations without notice to the employees. Lawyer acknowledged that he did not research the ethical implications of pretexting or surreptitious audio taping in South Carolina before dispatching his investigators to our state. Public Reprimand, by agreement. (Op.#27704, January 12, 2017)
Matter of Lundgren. Lawyer was licensed to practice law in Utah, Missouri, Kansas, and California, but not South Carolina. Lawyer lives in Utah with his wife. She is a former resident of South Carolina, where she had obtained a divorce in 1993. In 2009, Lawyer was admitted pro hac vice to represent his wife in a defamation action in South Carolina. Lawyer filed pleadings, motions, and other papers without his local counsel’s signature as required by the PHV rules. In 2012, Lawyer appeared for his wife in her re-opened divorce case involving her ex-husband’s retirement funds. Lawyer failed to file a copy of his PHV application or a motion to appear in the Family Court, again violating the PHV rules. The re-opened divorce case was resolved in 2013. A year and a half later, Lawyer issued a subpoena on the ex-husband’s employer and discovery requests to ex-husband (not his attorney). In addition to be improperly issued on a closed case, the subpoena did not comply with Rule 45, SCRCP, and the discovery requests did not comply with Rule 25, SCRFC, in a myriad of ways. Permanent Debarment, plus costs, by default. (Op.#27742, October 18, 2017)
Matter of Owen. Lawyer issued eleven subpoenas for documents to nonparties in a civil case without providing copies or notice to opposing counsel, as required by Rule 45, SCRCP. Lawyer did not comply with multiple requests for copies of the subpoenas from opposing counsel. Public Reprimand, by agreement. (Op.#27760, January 10, 2018)

Dishonesty and False Witnessing

Matter of Schiller. Lawyer is licensed in South Carolina, but not North Carolina. He entered into a fee agreement with a North Carolina client in a North Carolina personal injury case. When it came time to sign the settlement papers, the client disputed the attorney’s fees because the proposed disbursement differed from the signed fee agreement. Lawyer failed to withdraw from the case after being terminated and failed to notify the insurance company. Lawyer signed the client’s name to a covenant and had his paralegal notarize it. Public Reprimand, plus Ethics School, notary public classes for Lawyer and staff, and costs, by agreement. (Op.#27753, November 22, 2017)

Conflicts of Interest

Matter of Rogers. Lawyer was general counsel for a hospital. Lawyer volunteered to be conservator and guardian for a patient at the hospital. Lawyer did not disclose the potential

conflict to the patient. Lawyer hired her son to do repair work on the patient’s home and allowed him to stay overnight there. While Lawyer was hospitalized for three months. During that time, her some moved into the patient’s home, vandalized it, forged the patient’s name on her car title, and sold her car and other possessions. When Lawyer learned of her son’s misconduct, she reported it to law enforcement. Lawyer was ultimately charged with Failing to Report Exploitation of a Vulnerable Adult. She completed PTI, refunded the fees paid by he patient, and apologized. Public Reprimand, by agreement. (Op.#27740, October 4, 2017)

Unauthorized Practice of Law

Matter of Bacon. Lawyer hired a marketing company to solicit clients in other jurisdictions for loan modification. Lawyer also hired an outside company to process the client files. Lawyer did not adequately supervise either company. Through the processing company, Lawyer collected fees in violation of federal and state law. In addition, the lawyer accepted clients who were residents of ten states in which he was not licensed to practice law. In addition to the unauthorized practice of law, Lawyer violated several of those state’s rules and statutes, including improper collection of fees, failure to supervise nonlawyer staff, failure to communicate with clients, misleading statements to clients, created unjustified expectations, and failure to hold funds in trust until earned. Further, the marketing company created a website that included improper comparative language and use of the word “expertise.” Six Month Suspension, plus restitution and LEAPP, by agreement. (Op.#27710, April 19, 2017)
Matter of Emery. Lawyer entered into a contract with a New York law firm for referrals in loan modification cases. Lawyer accepted a number of cases for clients who resided in six states in which she was not licensed to practice law. In addition to the unauthorized practice of law, Lawyer violated a several of those state’s conduct rules, including failing to hold fees in trust until earned and failing to supervise the work of nonlawyers. Lawyer did not have any employees. Instead, she used the services of two paralegal contracting companies and the New York law firm. Those employees engaged in the unauthorized practice of law by setting fees and presenting fee agreements, resolving issues about the progress of cases, negotiating terms of loan modifications with lenders, and communicating with foreclosure attorneys and courts, all without Lawyer’s supervision. Lawyer also permitted the contracted nonlawyers to use her letterhead and email signature block and to hold themselves out as her employees when they were not. Lawyer also gave control of her Facebook page to a nonlawyer contract paralegal who posted confidential client information without consent, used improper comparative language, and advertised fee rates without disclosing information about the payment of costs. In addition, Lawyer used a nonemployee to create a website. He created it by cutting and pasting content from other websites. Lawyer did not instruct him on her ethical obligations and limitations and did not review the website before it went live. As a result, the website contained a number of violations. In a litigation matter unrelated to loan modification, Lawyer allowed a paralegal to file motions with cover letters without proof of service. It was the paralegal’s practice to add a “cc:” to opposing counsel to a copy of her cover letters, thus Lawyer was unable to establish that she had in fact served opposing counsel. In connection with that litigation, Lawyer filed a defamation action against the opposing parties and their counsel. She did not serve the defendants. Subsequently, she sent subpoenas to third parties without providing a copy to the defendants. She acknowledged that she was required to serve all parties with copies of subpoenas. She also acknowledged that it was improper to issue subpoenas prior to service of the summons and complaint and that the proper procedure to obtain the information she required would have been filing a Rule 27(a) petition. Public Reprimand, plus costs, restitution, and LEAPP, by agreement. (Op.#27712, April 19, 2017)

Matter of McKeever. Lawyer is licensed in Kentucky only. She and her husband moved to Charleston in 2010. Client owned a rental property in foreclosure. Lawyer convinced Client to allow her family to live in the house in exchange for representation in the foreclosure matter. Eventually, Lawyer convinced Client to deed the house to a sham company set up in her husband’s name. Lawyer then assisted her husband in filing bankruptcy in Kentucky and claiming the home as an asset in order to forestall the foreclosure. Lawyer also filed a lawsuit against Client in Kentucky state court on behalf of her husband claiming that Client defrauded him by conveying property encumbered by an undisclosed lien (the mortgage being foreclosed) and seeking

$327,500.00 in damages. In addition, Lawyer filed a second lawsuit against Client in Kentucky claiming $256,200.00 in attorney’s fees for the foreclosure action. In addition to the fraudulent conduct, the Court found Lawyer engaged in the unauthorized practice of law in South Carolina in the foreclosure matter and in an unrelated traffic court case involving her daughter. Permanent Debarment, plus costs and restitution, by default. (Op.#27739, September 20, 2017)

Advertising and Solicitation

Matter of Lord. Lawyer sent direct mail solicitation letters to potential criminal defense clients that violated RPC by (1) using the tag line “attorneys at law” when Lawyer was a sole practitioner;

(2) touted “28 years experience both as a lawyer and former law enforcement officer” when Lawyer only practiced law for 16 years; (3) using the phoneword (844) FIXTICKET which implied and ability to obtain certain results and created unjustified expectations; and, (4) disclosing the source of information about the potential client as simply “court records” when such disclosure has to be more specific. On his website, Lawyer improperly compared his services to other lawyers by stating that he has “unique insight into SC traffic laws that many other lawyers simply don’t have.” On his AVVO profile, Lawyer failed to ensure that disclaimers regarding testimonials, endorsements, and reports of past results were clear and conspicuous. In a prior disciplinary matter, Lawyer received a confidential admonition for revealing confidential client information on AVVO in response to a negative review. In the course of investigating the new allegations, ODC discovered that Lawyer did not remove the AVVO post after receiving the confidential admonition. Lawyer was also cited for violating the Lawyer’s Oath in the AVVO post by saying “The next time you are arrested, call a public defender and see what happens and after you sit in jail for 3 months they might get around to sending you a form letter.” Public Reprimand, by agreement. (Op.#27751, November 15, 2017)

Matter of Taylor. Lawyer successfully resolved a personal injury claim referred to him by two nonlawyer acquaintances. Although it was not contemplated at the time of the referral, lawyer paid the acquaintances a total of $68,000.00 for the referral. At the time the payments were made, Lawyer falsely characterized them as loans to a business partner who was also acquainted with the nonlawyers. Public Reprimand, plus costs and Ethics School, by agreement. (Op.#27750, November 15, 2017)

Judicial Misconduct

Matter of Johnson. Magistrate got into a fistfight at meeting of his local cotillion club. Forty-Five Day Suspension, by agreement. (Op.#277721, May 31, 2017)

II.Nondisciplinary Cases of Interest

What Constitutes a 'Prospective' Client'. Defendant posted a story on her website accusing Plaintiff of raping Doe. Plaintiff's lawyer sent a letter to Defendant threatening litigation. Defendant retained Attorney #1, an attorney at Law Firm. A couple of weeks later, Plaintiff's lawyer contacted Attorney #2, another attorney at Law Firm, about a possible co-counsel engagement in the case and provided names (including Defendant) for a conflicts check. Attorney

#2 responded with an email that included the statement "I hope we get the opportunity to work together." Within a week, Attorney #2 informed Plaintiff's lawyer that Law Firm would not be able to take the case due to a conflict. After filing suit, Plaintiff's lawyer issued a third-party subpoena to Defendant. Plaintiff's lawyer then moved to disqualify Attorney #1 from representing Defendant pursuant to RPC Rule 1.18. In denying the motion, the District Court judge held that Plaintiff was not a 'prospective client' of Law Firm. The Court noted that South Carolina's version of Rule 1.18 differs from the ABA Model Rule version in that a 'prospective client' is someone who has a "reasonable expectation that the lawyer is likely to form the relationship" rather than the broader model rule language, which includes a "person who consults with a lawyer about the possibility of forming a client-lawyer relationship." The Court viewed Attorney #2's email regarding the "opportunity to work together" as merely a polite curtesy, not as an affirmation that a commitment was likely. (Valizadeh v. Doe, Civil Action No. 3:16-03098-MGL, 2017 WL 86031, January 10, 2017)

Attorney's Right to Self-Representation. Lawyer represents indigent defendants in criminal cases. In 2012, Lawyer was publicly reprimanded for overbilling the Commission on Indigent Defense a total of $61,826.40. At the time, Lawyer had in excess of $110,000.00 in outstanding invoices with the Commission. Lawyer filed a civil suit against the Commission for the balance after an offset for the overbilled amount. The Commission filed an answer and counterclaim based on allegations of fraud and breach of contract. The Commission identified Lawyer's spouse/law partner as a witness in discovery because Lawyer billed for her work using his name. When Lawyer's counsel was relieved, Lawyer continued pro se. When Lawyer's spouse/law partner filed a notice of appearance on behalf of Lawyer, the court granted the Commission's motion to disqualify her and Lawyer as attorneys of record. On appeal, the court found that the circuit court did not abuse its discretion in disqualifying Lawyer's spouse/law partner because she was a necessary witness pursuant to RPC Rule 3.7. The Court of Appeals agreed with the Lawyer, however, that he should not have been disqualified from representing himself. The court held that Rule 3.7 does not prohibit a self-represented attorney from testifying as a fact witness because a litigant has a statutory right to appear pro se, even if that litigant is an attorney. (Brooks v. SC Commission on Indigent Defense, Court of Appeals Op.#5468, February 15, 2017)
Nonlawyer 'Agent' Representation in Magistrate Court. In this declaratory judgment action, the Supreme Court found that nonlawyer-owned Community Management Group, LLC, was engaging in the unauthorized practice of law in its representation of homeowner’s associations in connection with magistrate court matters. Under its management contracts, Community Management Group provided legal services to HOAs, including preparing and filing liens, civil actions, and judgments. Generally, the Court said, the practice of law includes "the preparation of pleadings and other papers incident to actions and special proceedings, and the management of such actions and proceedings on behalf of clients before judges and courts." One exception to the general rule is where a nonlawyer "officer, agent, or employee" can represent a business in civil magistrate’s court proceedings. The central question was whether the word 'agent' as used in the Court's precedent and South Carolina Magistrate Court Rule 21 includes a third-party agent like Community Management Group. The Court found that 'agent' includes individuals who are not

officers or employees of a business, but who have "some nexus or connection to the business arising out of its corporate structure," such as a member of the board of directors, but not a third- party agent. (Rogers Townsend & Thomas v. Community Management Group, Op.#27707, February 22, 2017)

Attorney Supervision of Refinance Transactions Obtained Through Online Lender. In this declaratory judgment action, the Supreme Court found that online mortgage lender Quicken Loans and the closing services company it contracts with are not engaging in the unauthorized practice of law in connection with residential mortgage refinancing in South Carolina because licensed attorneys are “involved at every critical step” in the process. The model, as described by the Court, involves South Carolina licensed attorneys reviewing and certifying title abstracts prepared by a nonlawyer abstractor; reviewing the closing package; explaining the documents to the borrowers and answering their questions; supervising the borrowers’ execution of the documents; reviewing the disbursement to ensure that it was done properly; and, reviewing certified copies of the recorded documents. The Court held that the extent of attorney involvement was sufficient to protect the interests of the public. (Boone, et al v. Quicken Loans, Inc. and Title Source, Inc., Op.#27727, July 19, 2017)

Rebecca Lunceford Kolb, Esquire: Faster and More Efficient Arbitrations

Faster and More Efficient Arbitrations under the
Delaware Rapid Arbitration Act, Even for Companies in South Carolina

By Henry R. Chalmers and Rebecca Lunceford Kolb
A powerful new tool exists for companies seeking quick, efficient, and private resolution of business disputes. The Delaware Rapid Arbitration Act (the “Act” or “DRAA”), 10 Del. C. § 5801 et seq., enacted in April 2015, streamlines the process for initiating arbitrations, sets tight deadlines for concluding them, automatically confirms arbitration awards, and provides speedy resolution of any challenges directly to the Delaware Supreme Court. How does it do this? Here’s a teaser: Among other things, it imposes financial penalties on the arbitrator if a final decision is not issued within 120 days of commencement.
First, though, rest assured that, despite its name, the DRAA is relevant to you as a South Carolina attorney. The Act is available for almost any commercial dispute involving at least one business entity organized under the commonly used jurisdiction of Delaware (which a party could accomplish by creating a Delaware subsidiary for the agreement at issue). The arbitration can be held anywhere, administered by any institution (or no institution at all), and the only limitation on the governing law is that the arbitration agreement itself (not the entire contract) be governed by Delaware law.
The relatively non-Delaware centric Act provides a useful option to address the growing concerns that arbitration no longer offers the quick and cost-effective alternative to litigation that was once its primary selling point. The DRAA is meant to reclaim the speed and efficiency originally promised by the arbitration process. The Act still gives parties significant latitude in drafting arbitration provisions, but tempers that freedom with selected default and mandatory provisions to ensure the Act’s overarching goals are not lost.
Perhaps the most novel and far reaching aspect of the DRAA is the stringent time frame under which most arbitrations must be completed and the incentives created to ensure arbitrators adhere to that limitation. Unless otherwise specifically agreed to by the parties before the arbitrator is appointed, “an arbitrator shall issue a final award . . . within 120 days of the arbitrator’s acceptance of the arbitrator’s appointment.” 10 Del. C. § 5808(b). The one exception to this is that the parties may extend the deadline by unanimous consent for up to 60 additional days, but not longer.
To add teeth to this requirement, the Act imposes financial penalties on the arbitrator if an award is issued outside the narrow time frame. Specifically, “an arbitrator that fails to issue a final award in compliance with § 5808(b) of this title is not entitled to full payment of the arbitrator’s fees: the arbitrator’s fees must be reduced by 25% if the final award is less than 30 days late; the arbitrator’s fees must be reduced by 75% if the final award is between 30 and 60 days late; and the arbitrator’s fees must be reduced by 100% if the final award is more than 60 days late.” 10 Del. C. § 5806(b). These penalties can be modified only for “exceptional circumstances,” which must be shown by clear and convincing evidence to a Court of Chancery on petition from the arbitrator. Good luck trying to convince your arbitrators to give you more time to comb through your opponent’s archived electronic documents or to take another half-dozen depositions.
Elsewhere in the Act are other clever mechanisms to keep an arbitration moving without the standard delay tactics. For example, if the parties fail to agree upon an arbitrator panel, the Act steps in to allow either party to petition the Delaware Court of Chancery to exercise its exclusive jurisdiction to make the appointment(s), which must be made within 30 days. But the Act limits court involvement beyond that by: conferring broad and exclusive power on the arbitrators to determine both substantive and procedural arbitrability as well as the scope of the matter before them; divesting the courts of jurisdiction to hear almost any disputes that might arise during the process; and barring courts from enjoining an arbitration after the arbitrators have accepted appointment. The arbitrator, meanwhile, is given the authority to issue interim rulings, including injunctions, that cannot be appealed or challenged.
The Act also addresses two other drawbacks of traditional arbitration, which are the time it can take to reduce the arbitration award to a final judgment, which traditionally is accomplished through initiating a civil action to confirm an award, and the possible sacrifice of confidentiality in doing so.
The DRAA addresses these concerns by eliminating the court-centered confirmation process entirely. Instead, if an arbitration award is not challenged within 15 days of its issuance, it is deemed automatically confirmed 5 days thereafter. No judicial confirmation proceeding is necessary or permitted. The prevailing party may then secure from the designated Delaware court a final judgment based on the confirmed award.
If a party decides to challenge a DRAA arbitration award, its options are severely limited. Gone are the days of lengthy appeals to an intermediate appellate court, followed by another year of appeals to the state’s highest court. Under the DRAA, parties have only three options: (i) agree in advance that no appeals will be permitted, in which case the final award is confirmed and the process is completed; (ii) agree in advance that any appeal must be taken to an arbitral appellate body, thereby preserving confidentiality and expediency; or (iii) if the parties do not elect either of these two options, then, by default, the award may be appealed only to the Delaware Supreme Court. Under the third option, the grounds for any court challenge are limited to those narrowly available for securing vacation, modification, or correction under the Federal Arbitration Act. 9 U.S.C. § 1 et seq. The parties may not expand this narrow scope of review.
Are you sold on the virtues of the Delaware Rapid Arbitration Act? If so, there are a few things to keep in mind when you draft your DRAA arbitration agreement. Under the Act, the agreement must: (i) be in writing and signed by the parties; (ii) expressly reference the “Delaware Rapid Arbitration Act”; and (iii) provide that the arbitration provision will be governed by or construed under Delaware law. Additionally, at least one party to the agreement must be a Delaware business organization or have its principal place of business in Delaware, and none of the parties can be a consumer or a homeowners, neighborhood, or civic association, as those terms are defined by Delaware law.

Gale DuBose, Esquire: Fatherhood

Table of Contents

Step 2: Which type of expungement do I need?
Step 3: What are the requirements for my type of expungement? Step 4: How do I apply for expungement?
Step 5: What happens after I get an expungement?

Disclaimer: You are encouraged to talk to an attorney before going forward with any legal process. See Appendix 3 of this packet for information on how to get an attorney. Clerks of court, judges, or other court staff cannot give you legal advice. This infmmational packet is not meant to provide legal advice or counsel. This packet is only for South Carolina cases. Expungement is different in each state. Expungement procedures and laws may be updated so the information in the packet is subject to change. Make sure the packet you have is current.

Step 1: What is expungement?

What does expungement do?
To get something expunged is to get it erased. By state law, you can apply to have certain arrests, charges, or convictions erased from your criminal record. This is called an expungement and is a court order that removes something from your criminal record.

How can an expungement help me?
Getting your record expunged can give you a better chance at getting a job or getting a professional license because your charge or conviction will no longer be on your South Carolina criminal record. Expungement can also help with getting housing and any other area where a criminal record can be a problem.

What can be expunged?
South Carolina expungements can only erase South Carolina charges or convictions. If you have a climinal record from another state you will have to find out what the laws are in that state and apply for expungement there. In South Carolina, only certain kinds of charges or convictions can be expunged. Typically, only minor offenses can be expunged. DUis cannot be expunged. This packet will explain the different types of expungement and help you determine if you might be eligible for expungement.

How does an expungement happen?
To get a record expunged you should:
0 learn what expungement is. This guide helps you do that.

figure out if your charge or conviction can be expunged. Not all crimes can be expunged from your record. If your charge or conviction cannot be expunged you can look at getting a pardon instead.
see what the requirements are for the type of expungement that matches your situation. Each type of expungement has its own set of requirements.

o start the application process. Expungements can be free or can cost up to $310. How much it will cost will depend on the type of expungement you get.

You do not have to have a lawyer for expungement. If you apply for an expungement on your own without a lawyer's help, you will be called a "self-represented litigant." This is also called proceeding pro se (pronounced "pro say"). Both terms mean that you have decided to be you1· own lawyer.

Expungement can give you a fresh start. Expungement can also be complicated. This packet is meant to guide you through the process, but it cannot cover all situations. If you hit a roadblock, please ask for help. The additional resources page gives you suggestions on whom to contact for help. The next section will show the different types of expungement and help you decide if you match one of the types.

What type of expungement do I need?
There are ten types of charges or convictions that may be eligible for expungement. Review the information below to see if your record matches one of the types. If you find a match, go to the page listed to learn more about that type of expungement.t are the requirements for my type of pe 1 Not Convicted

This type of expungement is only for records where there was no conviction. This is the easiest and cheapest (it's free!) type of expungement. There are three types of records that can be expunged under this law:

1:pe of expungement:

It is free, unless your convictions were part of a plea bargain. If so, the regular fees may apply.

If you meet the requirements, the coutt must expunge your record.

This type ofexpungement does not apply to verdicts of"not guilty by reason of insanity."

Other helpful infmmation:

This type of expungement is for non-conviction records fi·om higher courts like the Court of General Sessions. If you have a non-conviction record from a Summary Court, like Magish·ate Coutt or Municipal Coutt, from before June 2, 2009, you will have to apply to those courts for an expungement. For non-conviction records from June 2, 2009, or after: if you were not fingerprinted, you will need to apply to the appropriate Summary Court for an expungement; however, if you were fingerprinted, the record should have been expunged automatically, but you should check your record to be sure. Contact the Clerk of Coutt in that Sunmia1y Coutt's county for more information. The application to apply for an expungement in Summa1y Court can be found at www.sccourts.org/f01ms/pdf/SCCA223E.pdf.The appropriate comt order can be found at www.sccomts.org/forms/pdf/SCCA223B.pdf.
Certain state and local agencies (like detention centers) may keep a sealed record for three years after you get this type of expungement. Those records may only be disclosed by comt order or through a lawsuit. Anyone else who keeps a record that was supposed to be expunged is guilty of contempt of court. Law enforcement and prosecution agencies may keep the information indefinitely for certain purposes, while detention and c01Tectional facilities must destroy the records after three years and one hundred twenty days, unless there is a valid reason to keep the records.

If you get this type of expungement, the coutt order will say:

§ 17-1-40. The charge was dismissed, nolle prossed or the defendant was found not guilty on

If you think you fit the requirements, go to Step 4 on page 13 to learn how to apply for expungement.
Type2 Completed PTI
This type of expungement is only for people who have successfully finished doing everything required by a pretrial intervention program. To get your record expunged:

CJ You must have successfully completed a pretrial intervention program. Upon completion of the program, the solicitor should have marked your charge as not prosecuted (nolle prossed).
CJ The PTI Director must confirm that you have completed your program and are eligible.

There is one important effect of this type of expungement:

After the expungement process is completed, you will not have to admit to the charge you had expunged if you are asked about your record. This only applies to the part of your record you have expunged, not to any other charges or convictions.

If you get this type of expungement, the court order will say:

§ 17-22-lS0(a). The charge was 110/le prossed on                               by the Solicitor because the defendant successfully completed the Pre-Trial Intervention Program. (PTI Director must attest to eligibility for expungement).

If you think you fit the requirements, go to Step 4 on page 13 to learn how to apply for expungement.

© 2013-2016 South Carolfna Center for Fathers and Famllfes. Use of this packet is restricted to not-for-profit-purposes.
Completed TEP
This type of expungement is only for people who have successfully finished doing eve1ything required by a traffic education program. To get your record expunged:

D You must have successfully completed a traffic education program. Upon completion of the program, the solicitor should have marked your charge as not prosecuted (no/le prossed).
D The TEP Director must confirm that you have completed your program and are eligible.

If you get this type of expungement, the court order will say:
§ 17-22-330(A). The charge was nolle prossed on                              by the Solicitor because the defendant successfully completed the Traffic Education Program. (TEP Director must attest to eligibility for expungement).

If you think you fit the requirements, go to Step 4 on page 13 to learn how to apply for expungement.

Type4            Completed AEP

This type of expungement is only for people who have successfully finished doing everything required by an alcohol education program. To get your record expunged:

0     You must have successfully completed an alcohol education program. Upon completion of the program, the solicitor should have marked your charge as not prosecuted (nolle prossed).
D The AEP Director must confitm that you have completed your program and are eligible.

If you get this type of expungement, the comt order will say:

§ 17-22-530(A). The charge was nolle prossed on                              by the Solicitor because the defendant successfully completed the Alcohol Education Program. (AEP Director must attest to eligibility for expungement).

If you think you fit the requirements, go to Step 4 on page 13 to learn how to apply for expungement

Type 5         Fraudulent Check
This type of expungement is only for people who have been convicted of writing a fraudulent check as a first offense misdemeanor. To get your record expunged:

CJ The conviction you want to expunge must have been a first offense fraudulent check misdemeanor.
CJ One year has passed since your conviction.
CJ During that year you have had no other convictions.

Important things you need to know about this type of expungement:

The conviction of a traffic-related offense punishable only by a fine or loss of points does not prevent expungement.
This type of expungement cannot be used to remove a felony fraudulent check charge. Fraudulent check writing is a felony if the check is written for more than $5000.

If you meet the requirements, the court must grant the expungement.

You can only get one expungement under the fraudulent check type. The state will keep a non public record of what you have expunged so they can check your history if you apply again.

Other helpful information:

For this type of expungement, a guilty plea, a no contest (110/0 contendere) plea, or the forfeiture of bail all count as a "conviction."

If you get this type of expungement, the coutt order will say:

§ 34-11-90(e). The defendant was convicted of a first offense misdemeanor under the fraudulent check law on                                        and no additional criminal conviction as defined by§ 34-11-90(e) has taken place in one year from date of conviction,

If you think you fit the requirements, go to Step 4 on page 13 to learn how to apply for expungement.

Type6          Simple Possession
This type of expungement is only for people who have been given a conditional discharge for a first offense drug possession charge. You must have completed all the te1ms of the conditional discharge, which may have included getting drug treatment or doing community service. To get your record expunged:

0     The record you want to expunge must have been a first offense misdemeanor for drug possession.
0     You must have received a conditional discharge from the court.
0     You must have fulfilled all of the terms of the discharge.

Imp01tant things you need to know about this type of expungement:

If you meet the requirements, the court must grant the expungement.

The state will keep a non-public record of your expungement so that they can check your hist01y in case of a new charge. By law, you can only receive one conditional discharge.
After the expungement process is completed, you will not have to admit to the charge you had expunged if you are asked about your record. This only applies to the part of your record you have expunged, not to any other charges or convictions.

If you get this type of expungement, the coutt order will say:

§ 44-53-450(b). The defendant, who has not previously been convicted of any offense under Article 3, Chapter 53, Title 44 or any offense under any state or federal statute relating to marijuana, stimulant, depressant, or hallucinogenic drugs, successfully completed all terms of and received a conditional discharge of possession of a controlled substance under Section 44-53-370(c) and (d}, or Section 44-53-375(A).

If you think you fit the requirements, go to Step 4 on page 13 to learn how to apply for expungement.

Type7 General Misdemeanor
This type of expungement covers misdemeanors that have a maximum sentence of $1000 and/or 30 days, as well as first offense domestic violence in the third degree. To get your record expunged:

D The conviction you want to expunge must be a first offense of a misdemeanor.
D The misdemeanor must have a maximum possible sentence of $1000 and/or 30 days. D Three years has to have passed since your conviction.
D During those three years you had no other convictions.
D The Summary Court Judge must confirm that your charge is eligible for expungement.

There are special rules for expunging first offense domestic violence in the third degree. Instead of three years, five years must have passed during which there were no other convictions.

Important things you need to know about this type of expungement:

Please note that convictions for domestic violence in the third degree before June 4, 2015, were called criminal domestic violence (CDV).
The conviction of a traffic-related offense punishable only by a fine or loss of points does not prevent expungement.
You can only get one expungement under the general misdemeanor type. The state will keep a non-public record of what you have expunged so they can check your history if you apply again.

Other helpful information:

You will have to find out what the maximum sentence is for your offense. For example, you may have been sentenced to 30 days, even though the judge could have given you 60 days by law. Check the additional resources page to find out who can help you look up this information if you do not know.
For this type of expungement, a guilty plea, a no contest (110/0 contendere) plea, or the forfeiture of bail all count as a "conviction."
There are some convictions that cannot be expunged by this type. These are the exceptions:

An offense involving the operation of a motor vehicle (Title 56).
An offense contained in Chapter 25, Title 16, which includes all domestic violence offenses, except for first offense domestic violence in the third degree.

If you get this type of expungement, the comt order will say:

§ 22-5-910. The defendant was convicted of a first offense in magistrate, municipal or general sessions court for a crime carrying a penalty of not more than 30 days imprisonment or a fine of
$1,000, or both, on                    _,that offense did not involve an offense involving the operation of a motor vehicle, and no additional criminal conviction as defined by §22-5-910 has taken place within three years from date of conviction or five years from the date of conviction for first offense
criminal domestic violence (conduct occurring prior to June 4, 2015) or third degree domestic violence under §16-25-20. (Summary court judge must attest to eligibility if disposed of in that court.)

If you think you fit the requirements, go to Step 4 on page 13 to learn how to apply for expungement.

Type 8            Youthful Offender
This type of expungement is only for people who have been convicted under the Youthful Offender Act. Your criminal record will identify a conviction under the Youthful Offender Act with a "YOA." To get your record expunged:

0     The conviction you want to expunge must have been a first offense under the Youthful Offender Act (YOA).
0     Five years has to have passed since you completed your sentence. Completion of your sentence
includes finishing probation and parole.
0     During those five years you had no other convictions.

Important things you need to know about this type of expungement:
o     The conviction of a traffic-related offense punishable only by a fine or loss of points does not prevent expungement.
o     You can only get one expungement under the youthful offender type. The state will keep a non
public record of what you have expilllged so they can check your histmy if you apply again.

Other helpful information:

For this type, a guilty plea, a no contest (nolo co11te11dere) plea, or the forfeiture of bail all count as a "conviction."
Some convictions cannot be expunged by this type. These are the exceptions:

An offense involving the operation of a motor vehicle.
An offense that is classified as a violent crime. You should not have been convicted as a youthful offender if you committed one of these crimes.
An offense contained in Chapter 25, Title 16, which includes all domestic violence offenses.

If you get this type of expungement, the court order will say:

§ 22-5-920. The defendant was convicted of a first offense as a youthful offender on
_,that offense did not involve the exceptions enumerated in § 22-5-920, and no additional criminal conviction as defined by §22-5-920 has taken place during a five-year period following completion of his sentence, including probation and parole as a youthful offender,

If you think you fit the requirements, go to Step 4 on page 13 to learn how to apply for expungement.

Type 9 Failure to Stop
This type of expungement is only for people who have been convicted of a first offense for failure to stop for "blue lights." This is the only traffic offense that can be expunged. To get your record expunged:

D The conviction you want to expunge must have been a first offense for failure to stop a motor vehicle when signaled by law-enforcement vehicle.
D Three years has to have passed since you completed all of the terms and conditions of your sentence.
D During those three years you can have had no other convictions.

Important things you need to know about this type of expungement:

The conviction of a traffic-related offense punishable only by a fine or loss of points does not prevent expungement.
You can only get one expungement under the failure to stop type. The DMV will keep a non public record of what you have expunged so they can check your history if you apply again.
This type of expungement does not apply to any felonies. That includes second offense "failure to stop for a law enforcement vehicle" and "failure to stop for a law enforcement vehicle" where a death occurs.

If you get this type of expungement, the court order will say:

§ 56-5-750(F), The defendant was convicted of a misdemeanor first offense failure to stop motor vehicle on                                               and no additional criminal conviction has taken place for three years after completion of the sentence.

If you think you fit the requirements, go to Step 4 on page 13 to learn how to apply for expungement.
Type 10            Human Trafficking Victim

This type of expungement is only for people who are victims of human trafficking and, as a direct result of being a victin1, have been convicted for either human trafficking or prostitution. To get your record expunged:

0     You must be a victim of human trafficking.
0     You must have been convicted of human trafficking, as defmed in § 16-3-2020, OR you must have been convicted of prostitution.
0     Your pa1ticipation in the offense(s) you wish to be expunged must be a direct result of being a
victim.

Impottant things to know about this type if expungement:

Your record will inform you if you were convicted of human trafficking under§ 16-3-2020 or if you were convicted of prostitution.

If you think you fit the requirements, go to Step 4 on page 13 to learn how to apply for expungement.
Step 4: How do I apply for expungement?Getting an expungement is a step-by-step process. It is the job of the solicitor's office to help you with this process. Each step will be explained below with the information you will need to know. This is how it works:

What do I need to have?
You will need:

,/      your criminal record

,/     the application

,/      any required records

,/     three money orders

What do I need to do?
You will need to:

./    get a copy of your criminal record from SLED
./    figure out what type of expungement you will use
./    get the application from the solicitor's office
./    ask the solicitor's office what records you will need
./    get the records and fill out the application
./    get the required money orders
./    submit the application and money orders to the solicitor's office

These steps give you the infotmation you need to successfully get through the expungement process:
D Step 1: Get a copy of your criminal record from SLED. This record will help you figure out what you can get expunged and where you need to go to get it expunged. To get your record go to www.sled.sc.gov and click "SLED Catch." If you have problems, call the Records Check depattment at (803) 896-1443. A SLED record costs $25.
D Step 2: Figure out what type of expungement you will use. Use your criminal record to see if you might be a match for one of the types of expungement listed in this packet. If you think you might be able to get an expungement, now is a good time to figure out the cost (see next page) and start saving money to pay the fees. Think about putting aside a little money each week.
D Step 3: Get the application from the solicitor's office. To get a charge or conviction expunged you must apply in the county where the charge or conviction was put on your record. Each county is part of a circuit, and each circuit has a solicitor. This packet has a list of the counties and solicitors to help you figure out which office to contact. Once you decide which solicitor's office to contact, get a copy of their application for expungement. You may be able to print the application from their webpage, get the application by fax, or you may need to go their office in person to get a copy.
The application should have a form you fill out for the solicitor's office, as well as the court order you want the judge to sign. It is called an "Order for the Destruction of Arrest Records."
D Step 4: Ask the solicitor's office what records you will need. Each solicitor's office has a person who handles expungements. See the list included in this packet. When contacting the solicitor's office, ask to talk to that person or someone else who can help you with an expungement. Ask that person any questions you have, including what records or documents you will need to complete your application and how to get them.

D Step 5: Get the records and fill out the application. Follow the instrnctions the solicitor's office gives you for getting any records you need. Once you have the records, fill out the application you got from the solicitor's office. Make sure eve1ything is correct. The address you put on the application will be where they send your expungement if you get it, so it is very important that this address is one where you will get mail over the next few months.

Exgungement
Solicitor Fee
SLED Fee
Clerk of Court Fee
Total Fees

I: Not Convicted•
Nofee
Nofee
Nofee
None

2: Completed PTI
3: Completed TEP
$250.00
Nofee
$35.00

$250.00
Nofee
$35.00
$285.00

4: Completed AEP
$250.00
Nofee
$35.00
$285.00

5: Fraudulent Check
$250.00
$25.00
$35.00
$310.00

6: Simple Possession
$250.00
Nofee
$35.00
$285.00

7: General Misdemeanor
8: Youthful Offender 9: Failure to Stop
$250.00
$25.00
$35.00
$310.00

$250.00
$25.00
$35.00
$310.00

$250.00
$25.00
$35.00
$310.00

10: Human Trafficking Victim
$250.00
$25.00
$35.00
$310.00

D Step 6: Get the required money orders. The money orders you need depend on the type of expungement. No cash or personal checks are accepted. The table below shows the fees that are charged for each type of expungement. Be sure to check with the solicitor's office to make sure these are the fees they charge for your type of expungement.

$285.00
Some solicitor's offices do not keep their fee until they know you are eligible, but they don't have to do that. You should get the clerk of court fee back if you are not eligible.
You must have a separate money order for each fee.
D Step 7: Submit the application and money orders to the solicitor's office. This is the last step for you. Once you have completed the application and have the money orders you need, submit them to the solicitor's office. The solicitor's office will then review your application and dete1mine if you are eligible. If you are, they will send your application to a judge. If the judge signs the order, you will get a copy of it in the mail. Because your application has to be reviewed by several people, it could take a few weeks or a few months for you to find out the result.

*The nmmal fees will be charged if your non-convictions were pa1t of a plea bargain agreement.

Note: The process described in this packet is for adult record expungement. Juvenile record expungement is similar, but not the same. Information about juvenile record expungement can be obtained from the South Carolina Center for Fathers and Families, from the solicitor's office, or from the South Carolina Department of Juvenile Justice.

Step 5: What happens after I get an expungement?
After a judge has signed your expungement order there are still a few more things to do. These last few steps will help make sure that your record has been erased everywhere.

First, make sure that the record you had expunged has been removed from your SLED record. To do this, order another copy of your record from SLED. The contact infotmation for SLED is in Step 1 on page 13.

Second, check the public index to make sure the record is gone from there as well. You can find the public index at www.sccourts.org/caseSearch. Click the county for the record you expunged and accept the terms. You may have to choose which court the record was from and then type your name into the form. Although you may see entries for other things (such as an eviction or traffic ticket) you should not see the entry for the record you had expunged.

Third, make sure that your record has been expunged in commercial databases. Many employers and landlords use commercial background check services. These services may not have the same records as SLED, or keep their records up-to-date with expungement orders. To help fix this issue, send a copy of your expungement order to the Foundation for Continuing Justice. Here's what to do:

Get a certified copy of your expungement order from the Clerk of Court in the county where your record was expunged. This copy must be certified and must have a raised seal. Do not send the copy of your expungement thatyoureceivedinthemailafterthejudgesignedit. Keepthatcopyforyourself.
Go to www.continuingjustice.org/our-projects/crlminal-database-update/. Read through the page and click "form" at the very bottom. Download the .pdf application. Print the application. Fill in the requested information and mail the application and the certified copy of your expungement order to the address on the application. It will take approximately one month for the Foundation for Continuing Justice to process your application.

Note: Commercial background check services are not always as careful as government agencies like SLED. There may be mistakes in a background check that they produce. Mistakes are most common on the records of people with a common name.

Going forward...

Generally, after you have received an expungement you no longer have to admit to whatever you had expunged. If what you had expunged was the only thing on your criminal record and a job application asks you if you have a criminal record, you can now answer "no." Only the laws for types 2 and 5 specifically say that you cannot be charged with perjuty or giving a false statement for denying an expunged record, but this is generally considered true.

There are certain special circutnstances where you may have to disclose a record that has been expunged. One situation could be applying to join the military. If you have questions about this issue, you may want to talk to an attorney. Infmmation about how to contact an attorney who can help you is in Appendix 3 of this packet.

Roger Tennyson: Guide to Retirement Benefits

Determining Your Primary Insurance Amount

In 2011, the Social Security Administration (SSA) stopped sending out paper statements to Americans, saving an estimated 70 million dollars. In 2012, the SSA resumed sending out statements to those 60 and over. However, it can still be challenging to determine the amount you will receive when you begin taking payments.

What is Your Full Retirement Age?

Year of Birth       Full Retirement Age
1937 or earlier         65
1938       65 and 2 months
1939       65 and 4 months

You can find this information either by calling the SSA or visitng its website
(www.ssa.gov). You may also work with a financial services professional to help you get the answers you need to make an informed decision.

When Can You Start Receiving Your Social Security Benefit?
You may begin to receive early benefits from Social Security at age
62. If you start before your Full Retirement Age
(FRA); however, your benefit will be reduced. At age 62, your benefit will only be 75 percent of your Primary Insurance Amount (PIA). Depending on your lifespan, this can drastically reduce the amount of Social Security you receive over your lifetime.

Each year you delay receiving your Social Security benefit, your payment will increase. Once you reach your FRA, you can begin receiving your unreduced, full PIA. You can continue to delay receiving benefits until age
70. Your benefit will increase by eight percent each year, from your FRA until a max at age 70. By delaying payments from FRA to age 70, recipients will receive a 32 percent increase in benefits.
https://www.ssa.gov/planne rs/ret ire/ applying2.html
https://www.ssa.gov/ planners/ retire/ agereduction.htm 1
https://www.ssa.gov/OACT/Pro gData/ardrc.html

1956       66 and 4 months
1957       66 and 6 months
1958       66 and 8 months
1959       66 and 10 months
1960 and after       67

http://www.socialsecurity.gov/pubs/ageincrease.htm

Discount or Premium of Primary Insurance Amount9Apply         Benefit will                Example ii
at Age      be Percent of PIA     PIA is $1000

62                 75.0%                         $750

63                 80.0%                         $800

64                  86.7%                        $867

65                  93.3%                        $933

66                  100.0%                      $1,000

67                  108.0%                      $1,080

68                  116.0%                      $1,160

69                  124.0%                      $1,240

70                  132.0%                      $1,320

*Assuming FRA is age 66.
*This chart is for illustrative purposes only.

When Should I Apply for Social Security?

http://www.ssa.gov/OACT/COlA/ colaseries.html https://www.ssa.gov/news/press/ factsheets/colafacts2017.pdf

Can My Social Security Benefit Increase?
One of the most challenging questions is when to start receiving your Social Security benefit. There are pros and cons to delaying your benefit as well as receiving it as soon as you become eligible.

Two primary factors may help you make your decision. First, do you need the money? If you need the income to cover expenses in retirement, your decision is made. If you do not need the money, it might make sense to delay receiving your benefit and let your future payments continue to increase. The second factor is your health and life expectancy. Individuals in poor health may want to begin receiving their benefits earlier rather than later. If you are in good health and have a history of longevity in your family, it may behoove you to wait. No matter what you decide, there is an element of risk in your decision because your finances and health can change throughout
retirement.
There are calculators to help you determine your available benefit at various ages. By determining your breakeven age and your projected life expectancy, you can make an informed decision about when to apply for your Social Security benefit.

Each October, the SSA announces the amount in which monthly benefits will increase. Cost-of-living adjustments (COLA) are applied to individuals who are already receiving benefits and to those who have not begun yet. COLA is based off the Consumer Price Index from the third quarter of one year to the third quarter of the next. There is no guarantee of COLA annually, which can make it more challenging to plan your retirement income. As illustrated in the above table, there was no COLA increase in 2010 and 2011 and 2016.

How Spousal Benefits Work
If you are a married individual who had little to no earnings throughout your working years, Social Security can be received through spousal benefits. Once your working spouse files for his or
her benefit, you can also file and start receiving half of your working spouse's benefit. As the non-working spouse, you may file for benefits before FRA; however, you will receive a reduced spousal benefit.
Divorced or Widowed 11
If you were married for at least 10 years and have not remarried, you can receive spousal benefits based on your ex-spouse's work history. Again, you may apply as early as age 62, but you will have a reduced payment. If you have been divorced for over two years, your ex-spouse does not need to apply for benefits in order for you to receive yours. You will need to
produce information to verify you were married and for the SSA to locate appropriate records. With that information, they will be able to calculate your benefits.
If you are widowed, you may receive survivor benefits. You can apply as early as age 60. If you apply before your FRA, you will receive reduced benefits. If you are over your FRA, your benefit will equal 100 percent of your deceased spouse's benefit.
Important: Your survivor benefit will be 100 percent of your deceased spouse's actual benefit. If your deceased spouse took benefits early, it will be 100 percent of the reduced amount received. If benefits were delayed to age 70, it will be 100 percent of his or her maximum amount. If you were both receiving Social Security at the time of a passing, you will receive either 100 percent of your spouse's benefit
or continue receiving your benefit, whichever is greater.

Lastly, if you remarry, your survivor benefit will stop unless you are age 60 or over when you remarry.

Working in Retirement
Because of the recent economy, more people are choosing to work in retirement. Between age 62 and your FRA, you may have some of your Social Security benefit withheld if you earn too much income. If you are receiving your benefit and earning over $15,720 during your Low Threshold years (age 62 to your FRA), your benefit will be reduced. One dollar of your Social Security benefit will be withheld for every $2 you make over the threshold.
During your High Threshold year (the year you reach your FRA), there is another threshold income amount that is triggered. In the months leading up to your FRA, your benefit is reduced by $1 for every $3 you earn over $41,880.

The amount of Social Security withheld while you were earning income and receiving benefits will be used to recalculate your PIA; however, the recalculation will usually still work out to be lower than if you would have waited until your FRA to receive benefits. Once you reach your FRA, there is no limit to the
amount of income you can earn. You can maximize your earnings without fear of reduced Social Security benefits.

Taxation of Social Security Benefits
Depending on how much income you earn in retirement, your Social Security benefit may be taxable. Income that counts toward your limits include: pensions, dividends and interest, and even tax-free interest from municipal bonds. To determine your threshold income, take your modified adjusted gross income and add half of your combined Social Security benefits plus your tax exempt income. The chart below illustrates how much of your Social Security will be taxed.

There are only two ways to reduce the amount of tax you pay on your Social Security. One, reduce the amount of other income you are receiving. Two, change the type of investments you have that are paying dividends and interest. There is a planning opportunity that will allow you to receive a portion of your already taxed money and minimal interest.
This option can help you continue receiving the income you need and potentially reduce the amount of money that counts toward your threshold income.

Social Security Reform
Because of the current debt situation in the United States, many pre- and post-retirees have become concerned about their Social Security benefits. Current projections suggest that, in 2037, only 78 percent of promised benefits will be able to be paid. The government has proposed many options for reform, including
raising the retirement age, raising taxes and revising benefits. Any revision will likely be phased in over a period of time thus minimally affecting the baby boomer generation.

•What percentage of Americans age 65 and older receive Social Security benefits?
Answer: 90%

Social Security represents what percentage of income for elderly Americans?

Answer: 34%

Claiming Social Security benefits at the wrong time can reduce your monthly benefit

by how much?
Answer: 30%

How long is this reduction applied to your monthly benefit? Answer: FOR LIFE
What percentage of retirees claim Social Security benefits at age 62?

Answer: 43% of men and 48% of women

What percentage of retirees receive reduced Social Security benefits?

Answer: 72
1935: Social Security is enacted"

1940: Ida Mae Fuller receives the first monthly benefit from Social Security. Her check is for
$22.5422

1950: President Truman signs the 1950 Social Security Amendments, Administration becomes an independent agency

2000: President Clinton signs into law a bill eliminating the retirement earnings test (RED for persons at or above the full retirement a e (FRA)27

2012: The Social Security Statement became available online via SSA's website by visiting:
www.ssa. ov/m statement 28

Brenda Stewart: Using LinkedIn as a Professional & Organizational Tool without Violating the Rules of Professional Conduct

Using LinkedIn as a Professional and Organizational Tool
Without Violating the Rules of Professional Conduct

Course Description:
The use of social media to “network” is increasingly used in the professional environment, but engagement for attorneys is not without risk. LinkedIn can be a powerful tool to build professional relationships, promote services, and increase thought leadership. Lawyers using LinkedIn and other social networking sites must consider the ethical ramifications of online networking.
Throughout the program (as we cover each section of the outline) we will discuss the use of LinkedIn as a professional networking tool and how to be compliant with the rules regarding confidentiality, conflicts of interest, advertising and solicitation, pretexting, professionalism and civility, and non-lawyer staff supervision. (Applicable rules include Rule 7.1, Rule 7.2, Rule 7.3, Rule 7.4, Rule, Rule 8.4, Rule 5.1 and Rule 5.3)
This course is 1.00 hour in length.
Course Outline:
Getting started with LinkedIn

Introduction to LinkedIn – what is it and how is it being used
So why do I need a profile?
I have a profile – now what?
Best practices for a robust profile
The power user – getting the most out of LinkedIn

Building your LinkedIn Network

Optimize your profile
Leverage your connections
Use advance search to find people
Join groups that your target market joins
Follow your network’s updates and contact interactions

Using LinkedIn as a Marketing Tool

Share content with relevant groups
Give before you receive – the power of recommendations
Connect with new people
Make interactions personal
Create a call to action

Measuring ROI of Your LinkedIn Efforts

What is your LinkedIn reach?
How engaged are you in your LinkedIn groups?
Are you increasing your thought leadership?
Are you driving LI members to your website?
Have you received new business opportunities through LI?

Q&A

February 4, 2018: Wellness and Mental Health CLE: Jiva Yoga Studio

Integrating Mind & Body Strategies Into Your Daily Routine

In 2016 The American Bar Association (ABA) partnered with the Betty Ford Foundation to study the rates of substance use and other mental health concerns among lawyers, and its findings were reported in the Journal of Addiction Medicine.

Sample Size: 12,825 licensed, employed attorneys

The Key Findings:
– Levels of depression, anxiety and stress among attorneys were
significant, with 28%, 19% and 23% experiencing mild or higher levels of depression, anxiety and stress, respectively.

Men had significantly higher levels of depression, while women had higher levels of anxiety and stress.
In addition, 11.5% of the participants reported suicidal thoughts at some point during their career

Another Troubling Stat I Have To Mention
Using the Alcohol Use Disorders Identification Test (AUDIT), 20.6% of the lawyers surveyed were struggling problematic alcohol consumption. In comparison, 11.8% of highly educated workforce screened positive. In terms of frequency of alcohol use, study found that lawyers screened positive at a much higher rate than physicians and surgeons (36.4% of attorneys, compared to 15% of physicians and surgeons.)

And Depression? – Let’s take a look at those stats

– A 1990 study by Johns Hopkins University found that among more than 100 occupations studied, lawyers were the most likely to suffer from depression and were 3.6 times more likely than average to do so.
Source: “Occupations and the Prevalence of Major Depressive Disorder,” 32 Journal of Occupational Medicine (1990)).

– Some studies estimate that of the more than 1 million lawyers in this country, 25% of them suffer from some form of depression. (“Depression is the Law’s Occupational Hazard,”
Source: The Complete Lawyer, 2008, Daniel Lukasik.
Talking About The Elephant In The Room
We now know more about conditions for increasing happiness and work satisfaction, and how to address these mental health issues. For example, numerous studies indicate that practice of mindfulness and meditation is effective for treating depression and managing stress as well as anxiety.
Yet, lawyers are risk-averse. We don't want to be the first to try anything new because we love stare decisis. Not only is there a resistance to trying a different way of practicing law to reduce these issues lawyers struggle with, it appears that there is a deep level of denial.

Lawyers have an incredible amount of power and influence over not only our clients' lives, but over society as a whole. It's difficult to imagine lawyers doing their best work when we know that so many of them are struggling with these problems.
It's time that we start tackling these issues head on and think more holistically not only about mental illness in the legal profession but also about mental health. Not every lawyer will struggle with a mental illness, but each and every one of us has a mental health and we must pay attention to our own wellness.

Monday, February 5, 2018 CLEs
Judge Peter L. Fuge

materials pending

Judge Carmen T. Mullen: Pigs Get Fat and Hogs Get Slaughtered

"Pigs Get Fat and Hogs Get Slaughtered"
8:00 am

Basic Tenants
1. Know how the judge in your case runs their courtroom
2. Presenting evidence in a persuasive way requires understanding how people think, process information and make decisions in the context of a trial which requires learning how differing cognitive styles, values, and emotions all shape decisions in predictable ways, whether judge or jury.
3. Be mindful that your case begins before voir dire and continues through to deliberations, the jurors are watching everything.
Voir dire –
1. Do it for every case – integral part of trial work and requires preparation
2. Opposite of litigating where we are trained to not ask questions we don’t already know the answer to
3. Persuading jurors requires selecting jurors who are persuade-ABLE but doing so requires work even before they are chosen
4. Profile your jury, consider juror personalities and demographic variables
  1. The use of stereotypes in jury selection has evolved to include the utilization of empirical studies aimed toward establishing the predictive power of demographic and other background information
  2. Social biases of the jurors will have a huge impact on the end result of the case and the verdict rendered
  3. Determine in advance which experiences and attitudes will be more apt to work for, and against you in a given trial

Understand your audience
1. Jurors are not (normally) your peers OR your clients' peers BUT they are people and deserve your respect as the ultimate decision-makers
2. Jurors are there not just because they have to be but because they take their job as a juror seriously and understand they are deciding actual cases with real consequences
3. Make sure that they know you are taking your job seriously as well

Presenting your case
1. Tell a story - the "story model" argues jurors try to understand the evidence by constructing a story
  1. Jury decision-making is best understood as a matching process whereby the juror imposes a narrative story organization on trial evidence and then compares alternative stories to verdict categories and attempt to fit the evidence AND their verdicts into more or less coherent stories.
  2. Information presented in context with semantic meaning as part of a story is much easier to remember and has greater impact on inferences and judgments.Example: think of trying to recall a story or a sentence told to you versus a license plate number of random letters and numbers
2. Civility goes a long way with your client, judge and colleagues
  1. Argue to the Court, NOT with the Court. Always take the maxim "Attack the argument, not the speaker" one step further by pointing out the defects in the other party's position or arguments, not the failings in the court's rationale. Challenging the Court's reasoning abilities rarely helps one's case.
  2. If you act like an ass, the jury (and possibly the Judge) will be focused on the wrong thing
3. Witnesses / Expert Witnesses
  1. Don't unnecessarily pick on a party or witness.
  2. In general, endeavor to treat every witness with respect. In rare cases, it becomes necessary to personally attack a party or witness but the judge or jury had better feel such an attack is justified or it is likely to backfire.
4. < >CSI Effect – Television shows like "CSI" and the explosion of litigation are two phenomena highlighted in the press that surprisingly lack empirical evidence to support accounts of their prevalence
5. However, jurors do have higher/more realistic expectations of trial evidence due to the possibility/potential of bias during investigations
6. The "going rate" has resulted in reduced awards given that jurors may perceive an overabundance of frivolous lawsuits
7. Regardless of the type of media coverage, the salient point is that media impacts how people view the system itself
8. Essentially, in this age of instant access, jurors may have a difficult time understanding why they cannot have the information they want, particularly when they believe they are missing critical pieces of information
< >Avoid Visual Displays of Pique, i.e. frowns or gestures that could be construed as disapproval of the Court or its rulings.
Proper respect doesn't allow you to demonstrate your disapproval of a ruling with either word or gesture.
Not all lawyers are aware they are manifesting displeasure – learn to control what messages your expression and body language are sending
Have a response ready (even when you have just had a dagger planted between your shoulder blades) that smooths over the harm and move on to the next order of business.
Don't forget that the jury is watching AND that you will be before this judge on another day

Damages Arguments
1. Tell the jury the Plaintiff has suffered substantial injury and that you are asking for substantial money upfront in your opening statement OR that there is no substantial injury and the Plaintiff is looking to hit the lottery
2. Don't be afraid to ask the jury for what you want
3. Pigs get fat and hogs get slaughtered
Closing Arguments
1. Trial lawyers' job is to help make sense of the complexity
2. Jurors aren't used to thinking in terms of hierarchies of claims/defenses - elements- proof
3. Important to help the jury by showing your client has proved everything the law requires he prove to prevail
1. Jury Charges
  1. Jury charges are not always clear and many times confuse the jury even more
  2. Written charges are going back to the jury room…usually
2. Deliberations – Jury Decision-making
  1. Jurors are told they must base their decisions only on the facts and evidence presented but much more goes into their ultimate decisions about the case including the parties and attorneys involved
  2. Biases, belief & behavioral bases all play a part…as well as memory errors
1. < >Be Civil. Be courteous and respectful to the court, but don't stop there. Civility should extend to courtroom attaches, counsel, parties, and witnesses.
2. Vigorous advocacy and civility are not inconsistent.In fact, civility can enhance advocacy, whereas incivility usually detracts from persuasiveness.

Mary Fran Quindlen, Esquire

Frequently Asked Questions Regarding the New Blended Retirement System

Sections

Blended Retirement System (General)
Thrift Savings Plan (TSP)
Retirement Annuity
Lump Sum Payment
Continuation Pay

1. Blended Retirement System (General)

Training & Education
National Guard/Reserve Specific
Other Resources
Index of Questions

Q1.1. How is the military retirement system going to change?
A1.1. The National Defense Authorization Act (NDAA) for Fiscal Year 2016, as amended in the NDAA FY2017, created a new military retirement system that blends a defined benefit annuity with a defined contribution plan, through the Thrift Savings Plan (TSP). Service members should have a familiarity with the new Blended Retirement System (BRS), as many of the elements of the legacy retirement system remain in some form. The BRS retains the traditional
defined benefit annuity, but adjusts the years of service multiplier from 2.5 percent to 2.0
percent for calculating monthly retired pay. In addition, the BRS includes automatic government contributions of 1 percent of basic pay and government matching contributions of up to an additional 4 percent of basic pay to a service member's TSP account. The law also included a continuation pay provision as a way to encourage service members to continue serving in the Uniformed Services at the mid-career point. .Continuation pay is a direct cash payout, like a bonus, in return f9r a commitment of a minimum of three more years of service. Changes to the Uniform Services' retirement system will go into effect January 1, 2018. Always check with your Human Resource/Workforce ManagemenUPersonnel servicing office for the latest information or visit http://militarypay.defense.gov/BlendedRetirement for the latest information.
National Guard!Reserve specific information can be found in Section 7.Q1.2. When does the BRS take effect? Who is affected?A1.2. The BRS takes effect on January 1, 2018. New accessions on or after January 1, 2018, will be enrolled automatically in the new BRS. All members serving as of December 31, 2017, are grandfathered under the legacy retirement system and no one currently-serving will be automatically switched to the BRS. Though they are grandfathered under the legacy retirement system, active component service members with fewer than 12 years as of December 31, 2017, and National Guard and Reserve service members in a paid status, who have accrued fewer than 4,320 retirement points as of December 31, 2017, may choose to opt into the BRS. The opt-in window for BRS is from January 1, 2018 to December 31, 2018.
National Guard/Reserve specific information can be found in Section 7.

Q1.3. If I remain in the legacy retirement "high-3" system, how does my retirement change?A1.3. Nothing changes for those who choose to remain in the legacy retirement system.
National Guard/Reserve specific information can be found in Section 7.

Q1.4. I am a member of the United States Public Health Service Commissioned Corps (USPHS) or the National Oceanic and Atmospheric Administration Commissioned (NOAA) Officer Corps, does the Blended Retirement System pertain to me?A1.4. Yes, the National Defense Authorization Act of Fiscal Year2016 created the Uniformed Services Blended Retirement System, which includes all seven of the uniformed services of the United States. While many of the questions and answers in this document specifically address the military services, many of the same answers are applicable to USPHS and NOAA. Before making any decision related to the Blended Retirement System, check with your Human Resource/Workforce Management/Personnel servicing office for the latest information.

Q1.5. Will cadets and midshipmen at the service academies or in the Reserve Officer Training Program (ROTC) be given a choice between the BRS and legacy retirement system?A1.5. Cadets and midshipmen attending a service academy as of December 31, 2017, will be grandfathered under the legacy retirement system and will have the option to opt into BRS upon commissioning. ROTC cadets and midshipmen have the same option as long as they have signed their "contract" as of December 31, 2017. Cadets and midshipmen that are grandfathered under the legacy retirement system, upon commissioning (or being placed in a pay status) after 2018, will have 30 days to decide to remain in the legacy retirement system or opt into BRS. Each individual service member has a deadline, which is 30 days after their first day of duty following commissioning. Cadets and midshipmen who enter a service academy and ROTC cadets and midshipmen who sign their "contract" on or after January 1, 2018, will automatically be covered by BRS upon commissioning with no option to opt-in.

Q1.6. How will service members be notified if they are eligible for opting in to the blended retirement system?A1.6. Eligible service members will be notified beginning in November 2016 by their Uniformed Service about opting into the Blended Retirement System. Additional notifications throughout calendar year 2017 will remind eligible service members that they will be able to opt-in beginning in January 2018.

Q1.7. When do service members need to make a choice about BRS?A1.7. Service members who are eligible to opt into BRS will have all of calendar year 2018 to
make their opt-in decision. National Guard/Reserve specific information can be found in Section 7.

Q1.8. Does it make a difference if I opt into the new system at the beginning of 2018 or at the end of 2018?A1.8. Eligible service members may opt into BRS anytime between January 1, 2018 and December 31, 2018. It is important to note, service members opting into the new retirement system will begin receiving automatic and applicable matching government contributions effective the first pay period after opt-in. However, it is important for service members to fully understand BRS and to lake their lime to make an informed decision.

Q1.9. If a service member is eligible for BRS do they need to do anything?
A1.9. Yes, eligible service members will need to complete the mandatory BRS Opt-In Course on Joint Knowledge Online or their services' Learning Management System (if available) and physically opt into BRS anytime from January 1, 2018, to December 31, 2018. Service members in the Army, Air Force, Navy and Coast Guard that wish to remain under the legacy retirement system do not need to take any action. To opt into BRS, Soldiers, Airmen and Sailors will utilize MyPay, Coast Guardsmen will opt in via Direct Access and Marines will make their decision via Marine Online (MOL). Additional guidance will be provided separately for the U.S. Public Health Service Commissioned Corps and the National Oceanic and Atmospheric Administration (NOAA) Commissioned Officer Corps by their respective service. No one will be automatically moved to the BRS. Service members joining on or after January 1, 2018, will be automatically enrolled in the BRS.

Q1.10. Why is this new blended retirement good for service members?A1.10. Currently 81 percent of service members who join the military separate with no government retirement benefit. Under BRS about 85 percent of service members will receive a government retirement benefit if they serve at least two years, even if they don't qualify for a full retirement. This expansion of government retirement benefits ensures a greater number of service members receive DoD retirement benefits; previously only available to the 19 percent of active component and 14 percent of National Guard and Reserve members who served 20 or more years.

Q1.11. What should service members be most aware of when deciding whether to opt into BRS?A1.11. Service members who have no intention of making the military their career and staying at least 20 years should be aware that BRS would provide government benefits toward retirement through a defined contribution plan called the Thrift Savings Plan, as long as they serve a minimum of two years (opt-in service members are immediately vested). This new automatic and matching government contribution benefit is worthy of careful consideration. Early retirement savings, dollar cost averaging and the power of compounding are important life-long concepts service members will want to pay attention to during the mandatory BRS Opt-In Course. Eligible service members need to carefully review each retirement system to understand how their decision to either remain in the legacy retirement system or opt into the new BRS will impact them and their families.

Q1.12. If I elect to opt into the new Blended Retirement System can I change my mind later?A1.12. The decision to opt-in is irrevocable. II cannot be changed at a later dale.

Q1.13. Do you think that DoD will see a large number of service members leave because of the new Blended Retirement System?A1.13. DoD's analysis and experience suggests that the reduction in monthly retired pay might result in fewer members staying for a full career. However, Congress provided DoD the tools necessary to maintain the necessary force profiles. This includes DoD automatic and matching contributions to the service member's Thrift Savings Plan and Continuation Pay--an incentive/retention bonus targeted at the mid-career-point.

Q1.14. Which plan does DoD believe is the best for current service members?A1.14. The DoD has no preference. There is no one size fits all answer. Each member's decision will depend entirely upon his or her own personal circumstances. For some, staying under the legacy system will make sense. For others, BRS will be a better decision.

Q1.15. What reaction have you received from current service members on BRS?A1.15. Many service members want to hear more details about how the new retirement system will work and how it will impact them and their families. Service members should take advantage of the numerous DoD training and informational tools available to assist in making an informed decision on the financial implications specific to their retirement situation. BRS focused training courses are available on Joint Knowledge Online (JKO), and MilitaryOneSource.mil.
The official DoD BRS resource page at http://militarypay.defense.mil/BlendedRetirement provides a wealth of informational products and tool for service members. Finally, the official DoD BRS comparison calculator for analyzing benefits under the legacy retirement system and BRS will be available to service members in early spring 2017.

Q1.16. What does the DoD BRS Comparison Calculator provide service members? A1.16. The BRS Comparison Calculator will allow service members to compare estimated benefits under both retirement plans prior to making a decision. The comparison calculator walks service members through key information needed to make an effective comparison. Users can adjust 12 data fields to see how changes to their career and savings over time will impact retirement benefits. The BRS Comparison Calculator will be available in spring 2017.
National Guard/Reserve specific information can be found in Section 7.

Q1.17. There appears to be numerous calculators for comparing the two retirement systems-which calculator does DoD recommend I use?A1.17. The official DoD BRS Comparison Calculator is the only calculator endorsed by the DoD for supporting a service member's Blended Retirement System opt-in decision. However, service members can use any calculator they feel aids them in the decision making process. It is important to note, while other organizations have developed and fielded similar calculators, only the DoD BRS Comparison Calculator has been validated by each of the services, the Defense Finance and Accounting Service (DFAS) and the Department of Defense's Military Compensation Policy Directorate.

Q1.18. If I opt into BRS will my previous military service be calculated under the legacy system multiplier of 2.5 percent?A1.18. No, if you opt into BRS you move entirely into the new retirement system. For example, if you had four years under the legacy retirement system and 16 years under BRS, at retirement all 20 years are calculated under the BRS multiplier of 2.0 percent; you do not receive split multipliers.

Q1.19. What if I have a break in service-can I still opt into the Blended Retirement System?A1.19. If you left the military (prior to January 1, 2018) and rejoin after the opt-in decision year
(calendar year 2018), upon re-entry you will have 30 days to decide whether to stay in the legacy retirement system or elect the new BRS, so long as you are either in the active component and meet the less than 12-year service criterion or in the Reserve component and have less than 4,320 retirement points. However, if you re-enter military service in 2018, you will only have the remaining time in calendar year 2018 to make a decision to opt into BRS.

Q1.20. Will CSB/REDUX still be available to service members when BRS is implemented? A1.20. No, the Career Status Bonus (CSB)/REDUX sunsets on December 31, 2017. No CSB will be offered or paid after this date.

Q1.21. What financial resources will be available to service members at their installations?A1.21. Service members can visit their installation's Personal Financial Manager(s) or Personal Financial Counselor(s). Other installation resources may include Retirement Service Officers and Family Counselors. On base resources, such a credit unions and banks are another viable option. Additionally, Military One Source has trained Personal Financial Counselors available via phone or they can refer you to a local resource to assist you in your decision making process. National Guard/Reserve specific information can be found in Section 7.

Q1.22. Does the service member's spouse need to concur with the member's decision to opt into BRS?A1.22. The DoD encourages service members to make their opt-in decision in consultation with their spouse, significant other, Personal Financial Manager/counselor or other trusted agent prior to making an opt-in election. However, the law does not require spousal concurrence with the decision.

Q1.23. Does BRS affect my ability to participate in the Survivor Benefit Plan?A1.23. No, service members will still have the option of participating in the Survivor Benefit Plan.

2.Thrift Savings Plan (TSP)
Q2.1. What is the Thrift Savings Plan (TSP) and what is the Federal Retirement Thrift Investment Board (FRTIB)?
A2.1. The TSP is a defined contribution retirement savings and investment plan that offers the same types of savings and tax benefits many private corporations offer their employees under 401(k) or similar plans. The FRTIB is an independent government agency required by law to manage the TSP. They do so solely in the interest of the participants and their beneficiaries, which includes federal employees and members of the Uniformed Services.

Q2.2 How does the TSP figure into the BRS?A2.2. The BRS includes a TSP component. All service members joining on or after January 2018 will be automatically enrolled into TSP contributing 3 percent of their basic pay (or Inactive Duly Pay, sometimes referred to as Drill Pay in the National Guard and Reserve), with DoD automatic 1 percent of basic pay contributed by DoD starting 60 days after entry (Chart 2-1).
DoD will also match service member contributions up to an additional 4 percent after two years of service. The maximum government contribution is 5 percent if the service member is contributing 5

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percent of their basic pay (see Chart 2-2). Both the DoD automatic 1 percent and the matching contributions continue through the end of the pay period during which the service member attains 26 years of service. NOTE: Currently serving members who opt-in will see automatic and matching contributions the first pay period after opting in-there is no waiting period.

Chart 2-1: New Accession Eligibility for Automatic and Matching Contribution
NOTE: Current service members opting into the new Blended Retirement System between January 1, 2018 and December 31, 2018, will receive DoD automatic 1 percent contribution and up to 4 percent additional DoD matching beginning the first pay period after opting in - there is no 60 day/2-year waiting period as there is for new accessions starting January 1, 2018.

Q2.3. Does the money in the TSP belong to the service member? A2.3. For current service members who opt into BRS, they are immediately vested in (entitled to) their own contributions and any government matching contributions. However, service members must have at least two years of service in order lo be vested in the government's automatic 1 percent contributions and associated earnings. This does not mean two years from the date they opted-in or started the TSP, but refers to total time in service as measured from their Pay Entry Base Date.

New accessions are immediately vested in (entitled to) their own contributions and earnings. They will begin to receive the government automatic 1 percent of their basic pay after 60 days in service and must have two years of service in order to be vested in the government's automatic 1 percent contributions and associated earnings. At the beginning of two years of service, they can begin receiving matching contributions up to an additional 4 percent of their basic pay.
Service members are immediately vested in (entitled to) any government matching contributions and earnings at this point. All DoD automatic and matching contributions are governed by the existing Federal Retirement Thrift Investment Board regulations as it pertains to vesting.

Q2.4. How much will the DoD contribute to my TSP? A2.4.The following chart (Chart 2-2) identifies the TSP matching component of the Blended Retirement System.

Chart 2-2: Automatic and Matching Contribution

Q2.5. Is there a default TSP fund for opt-in eligible service members and can they change funds?
A2.5. Uniformed Service members who opt into the Blended Retirement System will retain the last contribution allocation on file with the TSP. If no contribution allocation is on file, a member who opts-in to the Blended Retirement System will have their future TSP contributions invested in an age-appropriate lifecycle fund and any past contributions will remain in the G Fund.
Service members can make adjustments to their TSP fund allocation at any time online at
TSP.gov. National Guard/Reserve specific information can be found in Section 7.

Q2.6. If I am a new accession into one of the Uniformed Services after January 1, 2018, how and when do I elect my TSP contributions?
A2.6. New accessions on or after January 1, 2018, will automatically be enrolled in the TSP. Their contributions will default to the TSP Lifecycle Fund appropriate for the individual's age, unless the service member designates other investment funds. Service members can adjust their TSP contribution percentage at MyPay (or their services automated pay system) and their investment funds (current or future contributions) at www.tsp.gov or by calling the Thriftline (1- TSP-YOU-FRST (1-877-968-3778)).

Q2.7. Can a service member put their contributions into the Roth TSP?
A2.7. Service members can elect to put their contributions into a traditional account, Roth account, or both. Service members can contribute in any whole percentage they choose subject to Internal Revenue Code (IRC) limits. Service members can make adjustments to their TSP account online at any time. All government automatic and matching contributions are based on the total amount of money (traditional and Roth) that the service member contributes each pay period. All government contributions are deposited into the service member's traditional account.

Q2.8. What is the difference between a Traditional TSP and a Roth TSP?
Q2.8. The decision whether to invest in a traditional TSP or a Roth TSP boils down to whether you believe you will be in a higher or lower tax bracket when you take your distributions. With the traditional TSP, cont.ributions are made with pre-tax money (income which has not been taxed-it comes directly out of your pay check). With the Traditional TSP, you defer paying taxes on your contributions and their earnings until you withdraw them. If you are making tax exempt contributions, your contributions will be tax-free at withdrawal, but your earnings will be subject to tax. In a Roth TSP, you pay taxes on your contributions as you make them (unless you are in a military combat zone or designated support area making tax-exempt contributions), and your earnings are tax-free at withdrawal as long as you meet certain IRS requirements. For more information visit TSP.gov for more information.

Q2.9. Can I contribute other forms of pay to my TSP?
A2.9. You can also contribute from 1 percent to 100 percent of any incentive pay, special pay, or bonus pay to your TSP - as long as you also elect to contribute from your basic pay -- up to established the IRS limits. You can elect to contribute from incentive pay, special pay, or bonus pay, even if you are not currently receiving them. These contributions will be deducted when you do receive any of these types of pay. However, only basic pay will be used in the calculation for DoD automatic and matching contributions. For more information on other forms of contributions visit TSP.gov.

Q2.10. Is there a limit to how much I can contribute to the TSP?A2.10. Yes, generally you can contribute up to the annual IRS elective deferral limit. Each year the IRS sets the limit employees can defer from their paychecks. It applies to traditional and Roth TSP accounts. This includes your basic pay, special pay and bonuses. To max out your TSP under the current contribution limit ($18,000 for 2017) you would need to contribute $1,500 per month from your pay checks. That is very aggressive, but it is certainly possible, depending on your rank, pay grade and living expenses. It is important to note, employer contributions are in addition to the annual elective deferral limit. Visit TSP.gov for more information on contribution limits. National Guard/Reserve specific information can be found in Section 7.

Q2.11. What are TSP catch up contributions?A2.11. Catch-up contributions are supplemental contributions that a service member age 50 or older (or turning age 50 during the calendar year), can make to the TSP beyond the maximum amount they can contribute through regular contributions. You can choose to make catch-up contributions on a traditional (pre-tax) basis or a Roth (after-tax) basis. It does not matter what type of regular contributions you are making. There is a yearly IRS cap on the dollar amount of catch-up contributions. For 2017, the catch-up contribution limit is $6,000.

Q2.12. Are there any special provisions on TSP contributions if I am assigned to a designated combat zone or direct support area?A2.12. If a service member is assigned to a designated combat zone or direct support area, contributions to their TSP are tax-exempt; that is, the money the service member contributes to their TSP goes in tax free. For service members contributing to a Roth TSP in a tax-exempt zone, their money would go in tax free and all earnings can be withdrawn tax free. Additionally, if you make tax-exempt contributions to the TSP while deployed in a designated combat zone or direct support area, the sum of your contributions and the government contributions to your TSP account cannot exceed the IRS annual addition limit ($54,000 for 2017), which is a much higher limit than the annual elective deferral limit. Member contributions above the annual elective deferral limit will be placed in the traditional TSP account.

Q2.13. If an existing service member is eligible to opt into BRS, are they able to buy back previous years of matching contributions?A2.13. No, TSP matching is not retroactive and there is no "buy-back" option. If you opt into BRS, you will receive the automatic 1 percent of your basic pay and up to an additional 4 percent government matching beginning the first pay period after opting in. If you already have a TSP account, these contributions can be added to your current account and they can continue to grow together in the same account.

Q2.14. How do I make changes to my TSP?A2.14. To change TSP contribution percentages or to update your address, service members in the Army, Air Force and Navy can make changes using MyPay, the Coast Guard can make changes using Direct Access and the Marine Corps can make changes using Marine Online.
Additional guidance will be provided separately for the U.S. Public Health Service Commissioned Corps and the National Oceanic and Atmospheric Administration (NOAA) Commissioned Officer Corps by their respective service. Additionally, all uniformed services can log on to TSP.gov to review account performance, print statements, make inter-fund transfers, and submit a new contribution allocation among other TSP/fund-management activities.

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Q2.15. What if I do not have a MyPay account with the Defense Finance and Accounting Service (DFAS)?A2..15. If you've never opened a MyPay account, need help changing your MyPay password, or changing your email address visit MyPay. For additional assistance, service members should consult their chain-of-command or their personnel pay office.

3.Retirement Annuity
Q3.1. If a service member ops into BRS and retires after 20 years, will they still get an annuity?
A3.1 Yes, for those service members who retire after at least 20 years of service (20 qualifying
years for the National Guard and Reserve), their retirement remains predominantly a defined benefit in which the service member will get monthly retired pay. Under BRS, the service member's monthly retired pay will be calculated with a 2.0 percent multiplier, times the average of the service member's highest 36 months of basic pay. Additional National Guard/ReselVe specific information can be found in Section 7.

Q3.2. If I remain in the legacy retirement system, what happens to my retirement plan? A3.2. If you remain under the legacy retirement system, nothing about your current retirement plan changes. You will still need to complete 20 years of service (or 20 qualifying years of service if you are in the National Guard or Reserve) to receive a military retirement pension.

Q3.3. Is the retirement under BRS divisible in a divorce?A member's pension under the BRS is similarly subject to a divorce decree as it is under the legacy retirement plan and subject to state court decisions.

4.Lump Sum Payment
Q4.1 What is the lump sum payment option?
A4.1 The lump sum provision of BRS gives service members choices at retirement. A service member may choose to receive either 25 percent or 50 percent of the discounted present value of their future retirement payments, in exchange for reduced monthly retired pay. Monthly retired pay returns to the full amount when the service member reaches their full Social Security retirement age, usual age 67. No such lump sum option exists under the legacy military retirement, system. National Guard/Reserve specific information can be found in Section 7.

Q4.2. Does an active duty service member have to take a lump sum payout at retirement? A4.2. No, active component service members will have a choice to receive their full monthly retired pay upon retirement or to elect a lump sum payment and reduced retired pay. The lump sum payment will be calculated as either 25 percent or 50 percent of their discounted retired pay from the date of retirement until the date the member would reach full Social Security retirement age, which for most is 67 years old. At full Social Security retirement age, all service members will receive their full monthly retired pay, regardless of their lump sum payment election. National Guard/Reserve specific information can be found in Section 7.

Q4.3. When do members of the active component need to apply/request the lump sum option?A4.3. For active component service members, the lump sum election must be made to your service no less than 90 days before retirement. The Defense Finance and Accounting Service (DFAS), will process your request for the lump sum, which will be paid out no later than 60 days from your date Of retirement. National Guard/Reserve specific information can be found in Section 7.

Q4.4. If a service member dies before age 67, does the surviving spouse need to repay the lump sum?A4.4. Once the lump sum is selected and distributed to the service member the money belongs to the individual-cit will not be recouped in the event of death. However, the remaining annuity will end unless the service member is enrolled in the Survivor Benefit Plan. For more information about SBP visit https://www.dfas.mil/retiredmilitary/provide/sbp.html.
Q4.5. What "discount rate," will DoD use to measure the value in calculating a service member's lump sum payout under the BRS?A4.5. The discount rate will be published each year and is based on the Department of Treasury published market rate, plus a factor that accounts for the unique aspects of military service. The formula for calculating the lump sum discount rate is outlined in the BRS implementation guidance, found in attachment 2 at http://militarypay.defense.gov/BlendedRetirement. The discount rate for 2018 will be published on June 1, 2017.

Q4.6. Can a service member roll over their lump sum distribution to the TSP, in part to minimize the tax implications?A4.6. The service member would not be able to roll over their lump sum payment into another retirement plan. Only an "eligible rollover distribution" can be moved to another retirement plan. In order for a distribution to be eligible to rollover, among other things, it must come from a "qualified trust." To keep it simple, this is basically an employer-sponsored retirement plan that meets certain requirements of the IRS tax code. The military retirement fund is not a "qualified trust" and therefore money that comes from it cannot be rolled over to another retirement plan.

Q4.7 If I don't serve for 20 years am I still eligible for lump sum?A4.7. Lump sum refers to a portion of the monthly retired pay a service member receives upfront after serving 20 or more years (or 20 qualifying years in the National Guard and Reserve). Therefore, the lump sum is only available for those that service 20 or more years and

retire from the Uniformed Services.

Q4.8. Does the spouse need to concur if the service member elects a lump sum? A4.8. While it's encouraged that service members discuss the decision on whether or not to take the lump sum with their family, it is not a requirement the service member's spouse concurs with selection of the lump sum.

Q4.9. Can a service member take the lump sum payout across several years to minimize tax liability?A4.9. The lump sum is considered earned income and is therefore taxable. Service members may choose to receive their lump sum payments in up to four installments over four years to reduce their tax burden.

5.Continuation Pay
Q5.1. What is continuation pay?
A5.1. The National Defense Authorization Act of Fiscal Year 2016, as amended by the NDM FY2017, includes a continuation pay provision as a way to encourage service members to continue serving in the Uniformed Services. Continuation pay is a direct cash payout, like a bonus. II is payable between the completion of eight years of service, but before completion of 12 years of service as determined by your service. Members receive continuation pay in return for a commitment of a minimum of three years of service. Active component service members (including Active Guard Reserve (AGR) and Full Time Support (FTS)) enrolled in the BRS will be eligible for a cash incentive of 2.5 to 13 times their regular monthly basic pay. Reserve component members will be eligible for 0.5 to 6 times their monthly basic pay (as if serving on active duty). Each service will publish guidance related to continuation pay rates. The rates will likely be predicated on factors including, but not limited to, retention needs, occupational series, and critically manned career fields. National Guard/Reserve specific information can be found in Section 7.

Q5.2. How is the 8 to 12 years of service calculated for continuation pay?A5.2, Active duty service members and National Guard and Reserve service members in a pay status are eligible for continuation pay when they complete between their 8th to 12th year of service, which is calculated from the service member's Pay Entry Base Date (PEBD).
Continuation pay may be paid at any time during this time period as determined by the service.

Q5.3. What if a service member is eligible to opt into BRS, but hits 12 years of service during the BRS opt-in window--is he or she still eligible for continuation pay?A5.3. A service member's eligibility to opt into the BRS is based on that member's status as of December 31, 2017. If they meet eligibility criteria on this date, they have all of 2018 to opt into BRS even if they eventually go over 12 years of service (active component) or exceed 4,320 retirement points (National Guard and Reserve), during calendar year 2018. However, eligibility for continuation pay is based on a member's years of service on the day they sign the agreement to continue serving. If a service member is eligible to opt into the BRS as of December 31, 2017, but will soon after go over 12 years of service, they must make their opt-in decision before reaching the completion of 12 years of service if they wish to receive continuation pay. For example, if a service member has 11 years and 10 months of service on or before December 31, 2017, that member would be eligible to opt into BRS anytime during 2018. However, if that same member wanted to receive continuation pay, he or she would only have two months (e.g.: February 2018) to opt into BRS and agree to the additional obligated service in order to receive continuation pay. Otherwise he or she will be ineligible for continuation pay.

Q5.4. How is continuation pay determined?A5.4. All service members are eligible for continuation pay. However, each service will determine when and at what rate service members will receive continuation pay. The continuation pay multiplier may be based on factors such as hard-to-fill positions, retention rates and specialty skill, among others. The services continue to work on guidance related to this provision. Natlonal Guard/Reserve specific information can be found in Section 7.

Q5.5 Will a service member be eligible for other bonuses, such as a reenlistment bonus, if he/she receives continuation pay?A5.5. Yes, continuation pay can be received in conjunction with other bonus at the service's
discretion and if not otherwise prohibited by law.

Q5.6. Can you receive continuation pay more than once?A5.6. No, continuation pay is a one-time payout to a service member, regardless of whether they change service, component, or career specialty.

Q5.7. Can the service obligation for continuation pay and other bonuses, such as a reenlistment bonus, be served concurrently?A5.7. The service obligation, as a result of continuation pay, can be served concurrently.

Q5.8. Can you receive continuation pay in the active component and then complete your obligation in another service or component?A5.8. Continuation pay is designed to retain you in your current occupation, service and component. Services will provide guidance related to fulfilling the service obligation incurred by continuation pay. National Guard/Reserve specific information can be found in Section 7.

Q5.9. Is continuation pay part of the service member's retirem1mt package?A5.9. Continuation pay is not part of a service member's retirement benefit, but it is essential to maintaining DoD's existing rates of retention of experienced personnel for the All-Volunteer Force. DoD analysis and experience suggests that the reduction in the legacy retirement plan (monthly retired pay) and the introduction of the TSP, may result in fewer members staying for a full career, and that providing continuation pay will help encourage these members to stay.

Q5.10. If a service member agrees to receive continuation pay in exchange for a minimum of at least three more years of service and does not complete the additional commitment, must the service member repay a pro-rated amount of the continuation pay?A5.10. While all situations are unique, continuation pay may be subject to repayment of a pro
rated amount. The decision as to whether or not to recoup payment is determined by the service.

QS.11. Can continuation pay be contributed to the Thrift Savings Plan (TSP)?AS.11. Yes, bonuses (such as continuation pay), as well as incentives and special pay can all be contributed to your TSP. It is important to note, each year the IRS determines the maximum amount you can contribute to tax-deferred savings plans like the TSP ($18,000 for calendar year 2017). You should keep the annual contribution limit in mind when deciding how much you will .contribute to your TSP account from your continuation pay. If you reach the annual maximum too quickly, you could lose some government matching contributions, because you only receive government matching contributions on the first 5% of your basic pay that you contribute each pay period. If you reach the annual limit before the end of the year, your contributions (and consequently your government matching contributions) will stop. If you contribute some or all of your continuation pay to your TSP and go over the IRS limit, be aware it could result in you meeting the IRS limit earlier in the year, causing you to lose out on additional government matching contributions.

6.Training & Education
Q6.1. What is DoD doing to educate service members?
A6.1. The character and substance of the changes to the military retirement benefit requires a focus on the education of service members to ensure informed decision making about benefit options. Joint Knowledge Online (JKO) has delivered three of the four targeted education courses for leaders, financial and retirement counselors, service members and their families who are eligible to opt-in. The BRS new accession course will be available in January 2018. All courses are accessible through JKO and publically available on Military One Source. In addition to the web based courses, webinars, social media discussions, financial roundtables and other communication tools are being utilized to educate the total force and external stakeholders.
National Guard/Reserve specific information can be found in Section 7.

Q6.2. Can service members take any of the BRS training courses?A6.2. Although some BRS training courses are specifically geared toward certain groups, all BRS training courses are available to all service members on JKO or www.MilitaryOneSource.mil. Anyone who is looking for additional information is encouraged to take any of the BRS course of interest to them.

Q6.3. How can service members complete training?A6.3. The preferred method of completing training is through Joint Knowledge Online (JKO), which is accessible to all members of the military. In some cases, the same training is available on individual service's learning management system. Additionally all courses are publically available on MilitaryOneSource.mil for access by military families and community entities, including Veteran and military service organizations. Remote, deployed and afloat commands can order courses as DVDs from DIMOC for delivering training. To order, visit www.dimoc.mil/customer/contact.html and complete the form, including the name and number Of the requested course. National Guard/Reserve specific information can be found in Section 7.
Q6.4. How do service members take the BRS Opt-In Course?A6.4. The BRS Opt-In Course (Course Code J3OP-US1332) is mandatory for all eligible service members. The course is officially hosted on JKO at http://jko.jten.mil. The course may also be taken on Military One Source. In some cases, the opt0in course has been loaded onto individual service's learning management system (e.g.: Marine Net). The opt in course may also be delivered in group settings utilizing the BRS Opt-In Course facilitator guide and presentation. II is important to note, if you take the course outside of JKO or your service's learning management system that the course completion certificate be presented to your training manager or commander to be properly recorded in your training file. For more information on completing the BRS Opt-In Course, contact your unit training manager.

Q6.5. What is the blended retirement system education strategy?A6.5. DoD started with training military leaders in June 2016. After training leaders, the DoD's education efforts, in October 2016, turned to training those experts who provide personal financial counseling to commanders, service members and their families. In 2017, the primary effort is to train and educate the opt-in population who will be making a decision regarding their retirement system in 2018. The
mandatory BRS Opt-in Course launched in January 2017 and provides eligible active-duty, National Guard and Reserve service members an understanding of financial concepts and an in-depth look at both the legacy retirement system and the new Blended Retirement System. In additio.n to the online training, a retirement comparison calculator and eTutorial will be available beginning spring 2017. A fourth course will be developed and provided to all new service
members who join the military on or after January 1, 2018. The focus of this course is to ensure our newest service members have a comprehensive understanding of their retirement benefits.

Q6.6. How long will the BRS courses be made available?A6.6. Training courses will continue to be modified and updated through the feedback received from the Joint Knowledge Online (JKO) platform. The BRS Leader Course and BRS Personal Financial Counselor/Educator Course will be available throughout the opt-in window. The BRS Opt-in Course will remain available on JKO for the foreseeable future.

Q6.7. The BRS Opt-In Course is mandatory for all eligible service members, why isn't it also required that service members meet with their installation Professional Financial Manager/Counselor?A6.7. The DoD has been positioning military Personal Financial Managers/counselors at local installations as an important resource in the decision making process. However, we want to ensure our service members feel comfortable with the individual they are receiving coun.sel from and therefore are able to go to any trusted agent, including a PFM/C, parent, spiritual leader, Military Service Organization, or other trusted agent.

Q6.8. When will the BRS New Accession Course be released?A6.8. The BRS New Accession Course, ttie fourth course in the series of BRS training, will be available January 1, 2018. It will be provided to all service members who join the military on or after January 1, 2018. The focus of this course is to ensure our newest service members have a comprehensive understanding of their retirement benefits.

7.National Guard/Reserve Specific
Q7.1. How is the retirement system changing for the National Guard and Reserve?
A7.1. The new military retirement system blends elements of the legacy retirement system with government automatic and matching contributions to a member's Thrift Savings Plan (TSP)--a more modern, 401(k)-style portable defined contribution plan that many civilian government employees enjoy today. Many of the elements of the legacy retirement system remain and both National Guard and Reserve service members should have a familiarity with how it works. The Blended Retirement System does not change when a National Guard or Reserve member is eligible to retire and National Guard and Reserve service members covered by the Blended Retirement System are still eligible for reduced age retirement if they perform qualifying active service.

Q7.2. How is eligibility for BRS different for members of the National Guard and Reserve? A7.2. Eligibility to opt-in is much broader for the National Guard and Reserve than the active component. Eligibility to opt into BRS is based on retirement points. National Guard and Reserve members with fewer than 4,320 retirement points as of December 31, 2017, and who are in a pay status, will be eligible to opt into BRS, regardless of how many service or qualifying years they have accumulated.

Q7.3. Why is DoD using retirement points for the Reserve component calculation? A7.3. The different eligibility criteria for National Guard and Reserve members is based on language in the National Defense Authorization Act of 2016 that mandated use of 10 U.S.C.
§12733 to compute eligibility for Reserve component members; 10 U.S.C. §12733 governs how years of service is calculated for a non-regular retirement.

Q7.4. What's the significance of 4,320 retirement points?A7.4. For retirement, National Guard and Reserve service is converted to equivalent active service by dividing accumulated retirement points by 360. Remember, the military considers a month as 30 days for pay purposes, so each day is worth 1130th of a month; 12 months would then equal 360 days. Thus, a National Guardsman or reservist with 4,320 retirement points would have 12 equivalent years of active service.

Q7.5. Does the new BRS change how National Guard and Reserve members acquire retirement points?A7.5. The Blended Retirement System does not change how retirement points are calculated for
members of the National Guard and Reserve. Points are still earned by participating in drill, attending annual training and completing active duty, among other eligible categories. BRS does not affect when a member of the National Guard or Reserve is eligible to retire.
Retirement eligibility and timing remains the same as it is under the legacy retirement system. National Guard or Reserve members with 20 or more qualifying years are eligible to receive their monthly retired pay starting at age 60 or earlier based on qualifying active service.

Q7.6. Are members of the Individual Ready Reserve (IRR) or Standby Reserve eligible to participate in the BRS?A7.6. Members of the IRR and Standby Reserve are eligible to participate in the BRS. However, they must be receiving pay to enroll in BRS. Therefore, members of the IRR and Standby Reserve who are eligible to enroll in the new system (because they were in the IRR or Standby Reserve as of December 31, 2017), but who do not drill in a paid status or are not on orders during calendar year 2018, will be allowed a one-time extension of the enrollment window beyond 2018 if and when they enter a paid status.

Q7.7. How long does a member of the IRR or Standby Reserve have to opt-in once in pay status?A7.7. If a members of the IRR and Standby Reserve returns to a pay status in 2018, they will have the remainder of 2018 to make an opt-in decision. After 2018, all members of the IRR and Standby Reserve will have 30 days to opt into the Blended Retirement System once in a pay status.

Q7.8. How will it work when a National Guard or Reserve service member retires under the Blended Retirement System?A7.8. The Blended Retirement System does not affect when a member (either active duty,· National Guard or Reserve) is eligible to retire. It still remains the same; qualified National Guard and Reserve service members are eligible to receive their retirement pay starting at age 60 or earlier based on qualifying active service.

Q7.9. I have a civilian 401(k) (or civil service TSP) and a military TSP account. Can I contribute to both?A7.9. Yes, however the TSP and similar civilian retirement plans (e.g.: 401(k)), share the same annual contribution limit ($18,000 for 2017) under IRS regulations. This means you cannot contribute more than the IRS elective deferral limit across both accounts in any given calendar year. Generally, this will not impact active component service members. However, many members of the National Guard and Reserve are either military technicians and have access to both a military TSP and a civil service TSP account, or are traditional members of the National Guard and Reserve who have another retirement plan through their civilian employment. As such, service members can make contributions to their TSP accounts and/or a 401(k) or similar retirement account in the same tax year, but are subject to a single IRS elective deferral limit. Service members should be careful not to exceed their annual contribution limit across their retirement accounts. If a service member's contributions reach the IRS elective deferral limit before the last pay date of the year, they will not receive all of the matching contributions to which they would otherwise be entitled. The only time a service member can exceed the IRS elective deferral limit is when they are deployed to a combat zone or direct support area or contributing catch up contributions. II is important to note, this annual additional limit includes automatic and matching contributions to the service member's retirement accounts from all sources. Visit TSP.gov for more on contribution limits.

Q7.10. Does a National Guard or Reserve service member's Thrift Savings Plan (TSP) election percentage carry-over when activating or deactivating?A7.10. National Guard and Reserve service members will not have to re-elect TSP percentages every lime their pay status changes (activating and deactivating)- TSP elections carry-over.

Q7.11. How does the lump sum payment work for the National Guard and Reserve? A7.11. Like their active duty counterparts, eligible National Guard and Reserve members have the option of electing a lump sum payment upon becoming eligible to begin receiving retired pay at age 60, or earlier with creditable active service, in exchange for a reduced level of monthly retired pay until reaching full Social Security retirement age, which is age 67 for most people.
Upon reaching full Social Security retirement age, the service member reverts to receiving full (not reduced) retired pay.

Q7.12. When do members of the National Guard and Reserve need to apply/request the lump sum option?A7.12. For National Guard and Reserve members, the lump sum election must be made to the component no less than 90 days before receipt of the non-regular retirement pay begins. This is typically at age 60, or earlier based on creditable active service. The Defense Finance and Accounting Service will process the service member's request for the lump sum, which will be paid out no later than 60 days from the date from when non-regular retirement pay begins.

Q7.13. At what rate will full-time National Guard and Reserve members receive for continuation pay?A7.13. The National Defense Authorization Act of Fiscal Year 2017 clarifies that Active Guard Reserve (AGR) and Full Time Support (FTS) service members are eligible for the same rates of continuation pay as their active component counterparts. FTS and AGR will be eligible for a cash incentive of 2.5 to 13 times their regular monthly basic pay.

Q7.14. For continuation pay, must National Guard and Reserve service member's obligated service be performed in the Select Reserves (SELRES) if they receive continuation pay or can they be part of the Individual Ready Reserve (IRR) or Standby Reserve?A7.14. National Guard and Reserve service members must be able to serve their continuation pay obligation in the Select Reserve if they receive continuation pay.

Q7.15. How will the training program be shared with the National Guard and Reserve? For example, will Unit Training Assemblies/drill time be used for financial readiness training? Will installation and financial counselors/educators be available to Guardsmen and Reservists?A7.15. The DoD continues to work closely with National Guard Bureau and Reserve Affairs leaders who are focused on leveraging curriculum and materials to educate their force and family. The DoD purposefully designed each BRS online course, so it would be available not only via Common Access Card (CAC) enabled websites, but also available without a CAC on www.MilitaryOneSource.mil, for access by members of the National Guard and Reserve when not attending drill. Additionally, the BRS Opt-in Course is available on DVD and PowerPoint for use by leaders during commander's calls and other unit formations or musters. Each of the components (National Guard and Reserve) are responsible for rolling out their own training and education plan to reach each of their eligible members. National Guard and Reserve service members will be provided duty time for completing the mandatory online BRS Opt-in Course and, if they choose, meeting with the installation/state/unit personal financial manager or counselor.

Q7.16. Will National Guard and Reserve service members earn retirement points under the Blended Retirement System as they do under the Legacy Retirement System today? A7.16. Yes, the Blended Retirement System does not change the manner in which members of the National Guard or Reserve earn retirement points.

Q7.17. How will those points be calculated (today's dollars/future dollars at discount rate)?A7.17. The Blended Retirement System does not change how retirement points are calculated for members of the National Guard and Reserve. Upon eligibility for retired pay, the member's retirement points are divided by 360 to arrive at an equivalent years of active service, similarly as under the legacy retirement system. The Blended Retirement System does not change when a member is eligible to retire. Furthermore, Reserve component members covered by the Blended Retirement System are still eligible for reduced age retirement if they perform qualifying active service.

Q7.18. What BRS resources are available for National Guard and Reserve members? A?.18. The DoD is committed to providing tools and information geared specifically toward the National Guard and Reserve. This includes focused training, communication products, and questions and answers tailored to the National Guard and Reserve. Visit http://militarypay.defense.gov/BlendedRetirement for the latest products. Additionally, the National Guard and Reserve have access to State professional financial counselors. For those remote Guardsmen and Reservists, www.MilitaryOneSource.mil can answer financial questions or refer you to a qualified counselor.

. 8. Other Resources

DoD Blended Retirement System Resource Webpage: http://militarypay.defense.gov/BlendedRetirement
Blended Retirement System Opt-In Course (CAC required): https://jkosupport.jten.mil/html/COl.xhtml?course_prefix=J3O&course_number=P US1332
Blended Retirement System Opt-In Course (non-CAC required): http://jko.jten.mil/courses/brs/OPT-IN/launch. html
Blended Retirement System Leader Course: (CAC required): https://jkodirect.jten.mil
Blended Retirement System Leader Course: (Non-CAC): http://jko.jten.mil/courses/brs/leader_training/Launch_Course.html
Military OneSource Website: www.militaryonesource.mil
A MyPay account is required to make BRS and TSP elections: https://mypay.dfas.mil
Information on the Thrift Savings Plan (TSP) can be found at www.tsp.gov
Learn more about saving money, reducing debt, and building wealth: www.militarysaves.org
Social Security Retirement Planner: https://www.ssa.gov/planners/retire/agereduction.html

9.Index of Questions
1.Blended Retirement System (General)+      01 .1. How is the military retirement system going to change?
+      Q1.2. When does the BRS take effect? Who is affected?
+      01.3. If I remain in the legacy retirement "highR3" system, how does my retlrement change?

+     Q1.4, I am a member of the United States Public Health Service Commissioned Corps (USPHS) or the National Oceanic and Atmospheric Administration Commissioned (NOAA) Officer Corps, does the Blended Retirement System pertain to me?
+      Q1.5. Will cadets and midshipmen at the service academies or in the Reserve Officer Training Program (ROTC) be given a choice between the BRS and legacy retirement system?
+     Q1.6. How will service members be notified if they are eligible for opting in to the blended retirement system?
+     01 .7. When do service members need to make a choice about BRS?
+      Q1.8. Does it make a difference if I opt into the new system at the beginning of 2018 or at the end of 2018?
+     Q1.9. If a service member is eligible for BRS do they need to do anything?
+     01 .10. Why is this new blended retirement good for service members?
+      Q1.11. What should service members be most aware of when deciding whether to opt into BRS?
+      Q1.12. If I elect to opt into the new Blended Retirement System can I change my mind later?
+                  01 .13. Do you think that DoD will see a large number of service members leave because of the new Blended Retirement System?
+     01 .14. Which plan does DoD believe is the best for current service members?
+      Q1.15. What reaction have you received from current service members on BR$?
+     Q1.16. What does the DoD BRS Comparison Calculator provide service members?
+                  Q1.17. There appears to be numerous calculators for comparing the two retirement systems-which calculator does DoD recommend I use?
+                  Q1.18. If I opt Into BRS will my previous military service be calculated under the legacy system multiplier of 2.5 percent?
+      Q1.19. What if I have a break in service-can I still opt into the Blended Retirement System?
+      Q1.20. Will CSB/REDUX still be available to service members when BRS is implemented?
+     Q1.21. What financial resources will be available to service members at their installations?
+      Q1.22. Does the service member's spouse neE!d to concur with the member's decision to opt into BRS?
+      Q1.23. Does BRS affect my ability to participate in the Survivor Benefit Plan?

Thrift Savings Plan (TSP)

+     Q2.1, What is the Thrift Savings Plan (TSP) and what is the Federal Retirement Thrift Investment Board (FRTIB)?
+     02.2 How does the TSP figure into the BRS?
+      Q2.3. Does the money in the TSP belong to the service member?
+      Q2.4. How much wm the DoD contribute to my TSP?
+      02,5. Is there a default TSP fund for opt-in eligible service members and can they change funds?
+                   Q2.6, If I am a new accession into one of the Uniformed Services after January 1, 2018, how and when do I elect my TSP contributions?
+      Q2.7. Can a service member put their contributions into the Roth TSP?
+     Q2.8. What is the difference between a Traditional TSP and a Roth TSP?
+     02.9. Can I contribute other forms of pay to my TSP?
+      02.10. Is there a limit to how much 1 can contribute to the TSP?
+      02.11. What are TSP catch up contributions?
+     02.12. Are there any special provisions on TSP contributions if I am assigned to a designated combat zone or direct support area?
+     02.13. If an existlng service member is eligible to opt into BRS, are they able to buy back previous years of matching contributions?
+     02.14, How do I make changes to my TSP?
+      02.15', What if l do not have a MyPay account with the Defense Finance and Accounting Service (DFAS)?

3.Annuity+      Q3.1. If a service member ops into BRS and retires after 20 years, will they still get an annuity?
+      Q3.2. If I remain in the legacy retirement system, what happens to·my retirement plan?
+      03.3. Is the retirement under BRS divisible in a divorce?

4.Lump Sum Payment+      Q4.1 What is the !ump sum payment option?
+      Q4.2. Does an active duty service member have to take a lump sum payout at retirement?
+      04.3. When do members of the active component need to apply/request the lump sum option?
+      Q4.4. If a service member dies before age 67, does the surviving spouse need to repay the !ump sum?
+                  Q4.5, What "discount rate," will DoD use to measure the value in calculating a service member's lump sum payout under the BRS?
+      04.6. Can a service member roll over their lump sum distribution to the TSP, in part to minimize the tax implications?
+      Q4,7 If I don't serve for 20 years am I still eligible for lump sum?
+      Q4.8, Dbes the spouse need to concur if the service member elects a lump sum?
+     04.9. Can a service member take the lump sum payout across several years to minimize tax liability?
-return to top-

5.Continuation Pay+     QS.1, What is continuation pay?
+      QS.2, How is the 8 to 12 years of service calculated for continuation pay?
+     Q5.3. What if a service member is eligible to opt into BRS, but hits 12 years of service during the BRS opt-in window
-is he or she still eligible for continuation pay?
+      05.4. How is continuation pay determined?
+     QS.5 Will a service member be eligible for other bonuses, such as a reenlistment bonus, if he/she receives continuation pay?
+     QS.6. Can you receive continuation pay more than once?
+      Q5.7. Can the service obligation for continuation pay and other bonuses, such as a reenlistment bonus, be served
concurrently?
+     Q5.8. Can you receive continuation pay in the active component and then complete your obligation in another service or component?
+     05,9. Is continuation pay part of the service member's retirement package?
+                  05.10. If a service member agrees to receive continuation pay in exchange for a minimum of at least three more years of service and does not complete the additional commitment, must the service member repay a pro-rated amount of the continuation pay?
+     05.11. Can continuation pay be contributed to the Thrift Savings Plan (TSP)?

6.Training/Education+     Q6.1. What is DoD doing to educate service members?
+     Q6,2. Can service members take any of the BRS training courses?
+      06.3. How can service members complete training?
+     06.4. How do service members take the BRS Opt-In Course?
+      Q6.5. What is the blended retirement system education strategy?
+      06.6. How long will the BRS courses be made available?
+                  06.7. The BRS Opt-In Course is mandatory for all eligible service members, why isn't it also required that service members meet with their installation Professional Financial Manager/Counselor?
+      06.8, When will the BRS New Accession Course be released?

7.Reserve Component Specific+      07 .1. How is the retirement system changing for the_ Natfonal Guard and Reserve?
+     07.2. How is eligibility for BRS different for members of the National Guard and Reserve?
+     07,3. Why is DoD using retirement points for the.Reserve component calculation?
+      07 ,4, What's the significance of 4,320 retirement points?
+     Q7.5. Does the new BRS change how National Guard and Reserve members acquire retirement points?
+     07.6. Are members of the Individual Ready Reserve (IRR) or Standby Reserve eligible to participate in the BRS?
+     07.7. How long does a member of the IRR or Standby Reserve have to opt-in once in pay status?
+      Q7.8. How will a work when a National Guard or Reserve service member retires under the Blended Retirement System?
+     07.9.1have a civilian 401(k) (or civil service TSP) and a military TSP account. Can I contribute to both?
+                   07.10. Does a National Guard or Reserve service member's Thrift Savings Plan (TSP) election percentage carry- over when activating or deactivating?
+     Q7.11. How does the lump sum payment work for the National Guard and Reserve?
+      Q7.12. When do members of the National Guard and Reserve need to apply/request the lump sum option?
+      07 .13. At what rate will full-time National Guard and Reserve members receive for continuation pay?
+                                                     07 .14. For continuation pay, must National Guard and Reserve service member's obligated service be performed in the Select Reserves (SELRES) if they receive continuation pay or can they be part of the Individual Ready Reserve (IRR) or Standby Reserve?                                               ·
+      07.15. How wilt the training program be shared with the National Guard and Reserve? For example, will Unit Training Assemblies/drill time be used for financial readiness training? Will installation and financial counselors/educators be available to Guardsmen and Reservists?
+                   07 .16. Will National Guard and Reserve service members earn retirement points under the Blended Retirement System as they do under the Legacy Retirement System today?
+      07.17. How will those points be calculated (today's dollars/future dollars at discount rate)?
+      07.18. What BRS resources are available for National Guard and Reserve members?

DISCLAIMER: Each question and answer is NOT intended to provide advice or guidance to uniquely specific issues or circumstances. The questions and answers in each section are provided for general information purposes only and may not cover every circumstance or individual case. Always check with your Uniformed Service's Human Resource/Workforce ManagemenVPersonnel servicing office for the latest information before making any financial decision related to the Blended Retirement System.

        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2017

                               ----------

                           CONFERENCE REPORT

                              to accompany

                                S. 2943


               November 30, 2016.--Ordered to be printed


114th Congress   }                                      {        Report
                        HOUSE OF REPRESENTATIVES
2d Session      }                                      {       114-840
_______________________________________________________________________

PART II--OTHER MATTERS

SEC. 641. USE OF MEMBER'S CURRENT PAY GRADE AND YEARS OF SERVICE AND
                    RETIRED PAY COST-OF-LIVING ADJUSTMENTS, RATHER THAN
                    FINAL RETIREMENT PAY GRADE AND YEARS OF SERVICE, IN
                    A DIVISION OF PROPERTY INVOLVING DISPOSABLE RETIRED
                    PAY.

    (a) In General.--Section 1408(a)(4) of title 10, United
States Code, is amended--
            (1) by redesignating subparagraphs (A), (B), (C),
        (D) as clauses (i), (ii), (iii), (iv), respectively;
            (2) by inserting ``(A)'' after ``(4)'';
            (3) in subparagraph (A), as designated by paragraph
        (2), by inserting ``(as determined pursuant to
        subparagraph (B)'' after ``member is entitled''; and
            (4) by adding at the end the following new
        subparagraph:
            ``(B) For purposes of subparagraph (A), the total
        monthly retired pay to which a member is entitled shall
        be--
                    ``(i) the amount of basic pay payable to
                the member for the member's pay grade and years
                of service at the time of the court order, as
                increased by
                    ``(ii) each cost-of-living adjustment that
                occurs under section 1401a(b) of this title
                between the time of the court order and the
                time of the member's retirement using the
                adjustment provisions under that section
                applicable to the member upon retirement.''.
    (b) Application of Amendments.--The amendments made by
subsection (a) shall apply with respect to any division of
property as part of a final decree of divorce, dissolution,
annulment, or legal separation involving a member of the Armed
Forces to which section 1408 of title 10, United States Code,
applies that becomes final after the date of the enactment of
this Act.

US Code Title 10, Section 1408(a)(4)
“(4)
(A)The term “disposable retired pay” means the total monthly retired pay to which a member is entitled (as determined pursuant to subparagraph (B) [1] less amounts which--
(i)
are owed by that member to the United States for previous overpayments of retired pay and for recoupments required by law resulting from entitlement to retired pay;
(ii)
are deducted from the retired pay of such member as a result of forfeitures of retired pay ordered by a court-martial or as a result of a waiver of retired pay required by law in order to receive compensation under title 5 or title 38;
(iii)
in the case of a member entitled to retired pay under chapter 61 of this title, are equal to the amount of retired pay of the member under that chapter computed using the percentage of the member’s disability on the date when the member was retired (or the date on which the member’s name was placed on the temporary disability retired list); or
(iv)
are deducted because of an election under chapter 73 of this title to provide an annuity to a spouse or former spouse to whom payment of a portion of such member’s retired pay is being made pursuant to a court order under this section.
(B)For purposes of subparagraph (A), the total monthly retired pay to which a member is entitled shall be--
(i)
the amount of basic pay payable to the member for the member’s pay grade and years of service at the time of the court order, as increased by
(ii)
each cost-of-living adjustment that occurs under section 1401a(b) of this title between the time of the court order and the time of the member’s retirement using the adjustment provisions under that section applicable to the member upon retirement.”

George Durant: Business Valuations

Whitney L. Moore, Appellant/Respondent, v.
Arthur R. Moore, III, Respondent/Appellant. Appellate Case No. 2013-001359
Appeal from Charleston County Vicki J. Snelgrove, Family Court Judge
Opinion No. 27579
Heard February 5, 2015 – Filed October 7, 2.

Donald B. Clark and Margaret D. Fabri, both of Charleston for Respondent/Appellant.
JUSTICE KITTREDGE: This domestic relations matter comes before us on cross-appeals from Whitney Moore (Wife) and Arthur Moore, III, (Husband) from an order of the family court valuing and dividing the parties' closely held business, Candelabra. We affirm the family court's inclusion of Wife's enterprise goodwill in the business as marital property. We, however, modify the valuation and equitable division award, and for the reasons explained below, we direct Wife to pay to Husband the sum of $338,525, together with interest at the rate directed by he family court, calculated from the date of the family court final order, within ninety days of the sending of the remittitur to the family court pursuant to Rule 221, SCACR. We reverse the award to Husband of $122,557 in expert witness fees.

In appeals from the family court, this Court reviews factual and legal issues de novo. Simmons v. Simmons, 392 S.C. 412, 414–415, 709 S.E.2d 666, 667 (2011).
Thus, this Court has jurisdiction to find facts in accordance with its own view of the preponderance of the evidence. This broad scope of review, however, does not require the Court to disregard the findings of the family court, which is in a superior position to make credibility determinations. Lewis v. Lewis, 392 S.C. 381, 385, 709 S.E.2d 650, 651–52 (2011). We have carefully reviewed the approximately 3500-page record, and we commend the excellent family court judge for her thoughtful handling of this contentious and difficult case.
II.

A.

The parties met and began dating when they were living in Charlotte, North Carolina. They were married on June 9, 2001, and lived throughout the marriage in Charleston County, South Carolina. Two children were born of the marriage. The parties separated in March 2011.

Wife graduated from the University of North Carolina at Greensboro in the early 1990s with a four-year degree in textile products marketing and a minor in business. Upon graduation, Wife was employed with Belk department store in its two-year executive training program, which she described as "kind of extended schooling," through which she learned the "ins and outs of retailing" and "shadow[ed] everybody from the bottom to the top."

In the five years following the Belk executive training program, Wife held various positions within the Belk company, including area sales manager, assistant buyer, a position with the payroll and productivity department, and a "co-op" position through which Wife was employed by both Belk and clothing vendor Tommy Hilfiger. Wife testified that during her employment with Belk and Tommy Hilfiger, her responsibilities involved scheduling/staffing; budgeting; managing sales, costs, and shrinkage; creating purchase orders; building and enhancing

working relationships with vendors; selecting product from various lines and vendors; determining the amount of product needed at various stores; conducting sales and product merchandising seminars throughout a ten-store area; and assisting with the development of a special productivity initiative designed to more effectively manage staffing costs and enable further reductions in product pricing.

Husband studied corporate communications at the College of Charleston, where he also played baseball. After college, he was drafted to be a pitcher for the Florida Marlins in 1995, but injuries early on foreclosed the opportunity for a major league career. Thereafter, Husband "took a little break" and worked for a golf facility on Hilton Head Island for a few months before taking a sales position with Alltel Communications in Charlotte.

B.
After the parties met in Charlotte and began dating, Husband accepted a position selling medical supplies to nursing homes and prisons for Neighborcare, which required him to relocate to Charleston. Wife followed Husband to Charleston in late 1999 and briefly held a commission-only position selling fashion eyewear to optometrists throughout South Carolina before opening her own lighting and design business in April 2001, just before the parties married.1 Throughout his tenure at Neighborcare, Husband traveled frequently throughout the state and earned $170,000 to $185,000 per year. Wife drew some money out of Candelabra in the early years to contribute to household expenses, but it was Husband who paid the bulk of the household expenses.

Candelabra is a retail business located on Coleman Boulevard in Mount Pleasant that sells trendy, high-end boutique lighting, home furnishings, and home accessories in a retail showroom. Within the last several years, a growing percentage of Candelabra's business has come from a developing base of internet sales. Candelabra does not manufacture any products; rather, it sells products manufactured by various vendors on a non-exclusive basis.

Candelabra is a registered S-Corp, with 51% of the stock titled in Wife's name and 49% titled in Husband's name. From the beginning, Wife has served as the

1 Wife initially opened the store under the name of Katyna Lighting and Design in partnership with a former friend. When that partnership dissolved, Wife continued in business and changed the name to Candelabra.

President of Candelabra and has been responsible for overseeing all business operations: financial forecasting and management, budgeting, hiring, scheduling, training, merchandising, and most importantly, selecting and displaying all of the products. By all accounts, Wife is an experienced, successful businesswoman with an exceptional "eye for design," a knack for selecting specific products that appeal to her customers and consistently generate sales, and the ability to create long term, positive relationships with vendor and manufacturer representatives.2
C.

When Candelabra first opened in 2001, the Charleston housing market was experiencing a boom, and Wife was able to grow the business by establishing relationships with lighting vendors and with various subcontractors, particularly those working in the I'On development in Mount Pleasant, who continued to do business with Candelabra after completion of the I'On development.

As sales continued to grow, Wife determined that Elizabeth Goff, a key Candelabra employee, should be dedicated exclusively to builder and contractor sales. In the early years of Candelabra's existence, Wife's growth strategy was to continue to nurture the existing contractor relationships, primarily through Goff, while also establishing new relationships with other contractors and interior designers, and expanding Candelabra's product offerings to include more than just lighting. At that time, internet retailing was not well-established among small businesses, so there was no internet component to Candelabra's business.

Although Husband had held the title of Candelabra's Vice President since the time of incorporation, other than assisting Wife in preparing the store for the grand opening and intermittently serving as the "muscle" to help move, hang, or deliver heavier items, Husband was not actively involved in the business prior to 2005.
However, several things occurred in 2005 that impacted Candelabra and the parties' working arrangements. First, after experiencing four miscarriages, Wife had become pregnant and was having a difficult pregnancy that, at times, required her to be on bed rest, thereby reducing the amount of time she was able to spend at the store. Around the same time, Husband's employer, Neighborcare, was bought out by another company, and Husband's position was eliminated. Thereafter, Husband began spending more time at Candelabra such that he considered his

2 In 2007, Candelabra won a prestigious industry award for being the best lighting store in the southeastern United States. Candelabra was nominated for this same award in 2012.

work there to be his full-time employment, and he did not seek any other type of employment.3

In the fall of 2005, while Wife was on maternity leave with the couple's first child, Husband determined that Wife's strategy aimed at contractor sales was too tedious and time-consuming, and Husband unilaterally determined that the better sales- generation strategy would be to pursue large corporations and multi-unit dwellings, such as the 122-unit Tides Condominium project in Mount Pleasant. Candelabra eventually landed the Tides project.

Goff had difficulty working for Husband, and she resigned her position at Candelabra when Wife returned to work from maternity leave. Candelabra lost business when Goff left and took the contractor business with her. As Wife testified:

It was bad business to throw away all of our old contractors in lieu of a one-time deal no matter what it was making us and I knew that. It didn't mean we shouldn't take it on, [but] we needed to structure it where we could keep our contractors and keep our other business flowing and then have somebody who worked the Tides additionally.

. . . .

I've never been in a business where you take the one shot quick fix fast money deal in lieu of letting go of your constant and consistent business that you built relationships with because when you nip that off in the bud and the Tide[s are] gone, you might not have anything else left because the Tides is a one shot deal. . . . It's nothing you can really grow your business on if you're not continuing good business with your other contractors. And when [Husband] came in and talked

3 According to Wife, the couple never had a discussion about what Husband's next career move would be; rather, "[h]e just started kind of going into Candelabra," despite her impression that his career would be continuing in outside sales.
Husband testified that he saw how difficult the pregnancy was for Wife, and regardless of whether she asked for his help, he decided he would not seek other employment so he could spend more time helping out at Candelabra.

with [Goff] about giving up contractors and that we weren't going to go that route anymore, she was dumb founded and she left, and she took the contractors and we were left with the Tides.4

During this same period of time, the parties were experiencing marital discord as well. The evidence demonstrates Husband has a violent temper. A particularly intense disagreement occurred during the spring of 2007, in which Husband became so angry that he threw a drink glass at Wife, narrowly missing her.
Husband then grabbed the couple's child, who witnessed the incident, and locked himself and the child in the child's bedroom. As a result of this altercation, the parties separated for several months but reconciled in September 2007, when Wife discovered she was pregnant with the couple's second child, who was born in May 2008. Wife returned to Candelabra full-time after her second maternity leave, assuming all of her previous managerial responsibilities, while also being the children's primary caregiver.

During 2007, Husband urged Wife to sell Candelabra, attributing the problems in their relationship to the pressures of running the business. Wife did not want to sell the business, but she acquiesced, and the business was listed for sale.
Eventually, a buyer agreed to purchase Candelabra with the intent of turning it into a website business. The agreed-upon purchase price was $1.7 million, which the parties felt was a "surreal" price given the business was not, in their opinion, worth that much; however, the buyer backed out and the sale fell through around the fall of 2008.

By that time, the recession had hit, and the business was seriously struggling.5 Candelabra had a website, but it was very simplistic—providing basic information about the store and not offering online purchases. Sometime after a discussion with Wife's father, the parties began aggressively pursuing a website business to counteract the drop in sales from the downturn in the economy, and Candelabra re focused its efforts towards creating a better sales and distribution network via the internet.

4 Eventually, Husband recognized his poor judgment and attempted to win back the contractor business Candelabra had lost, to no avail.

5 Candelabra suffered net operating losses of $105,919 and $97,487 in 2008 and 2009 respectively.

D.
Recognizing that online retailing presented a lucrative business opportunity, the parties began the process of transforming Candelabra's website from one that offered only information about the physical storefront into one that became the central feature of Candelabra's business operations. Today, the www.shopcandelabra.com website allows customers to shop the store's current products and functions as a portal through which customers may place online purchases. The website's home page allows users to shop for merchandise by category (lighting, furniture, home décor, etc.), subcategory (chandeliers, pendants, lamps, etc.), or by current trends in the lighting and interior design industry.
Because Candelabra's target customer is very brand-oriented, the website also allows users to sort product by the brands of merchandise Candelabra carries.

Additionally, the parties implemented a robust online marketing campaign to increase the website's online presence, including search engine optimization (SEO) techniques, through which the contents of www.shopcandelabra.com are made to appear particularly relevant to the algorithms of search engines like Google.
Because many customers are drawn to Candelabra's website through the specific brands, the SEO campaign was implemented one brand at a time and was geared towards keywords associated with the brand and the best-selling products from each brand.

E.
Ultimately, this strategy shift proved successful, to the point that as much as 80% of Candelabra's total sales were generated by the website.6 However, it is from this point forward that the parties provide vastly different accounts of each of their contributions toward the creation and implementation of the revamped Candelabra website. Husband claims the website was his idea, that Wife did not want the website, that he educated himself on the website creation process and that he had to drag Wife kicking and screaming into the technological age. According to Husband, Wife was not a part of the development of Candelabra's website, and the key to the success of the site is attributable solely to his efforts in hiring key

6 By year-end 2010, Candelabra's net operating income had rebounded to $45,484, and in the first six months of 2011, Candelabra's net operating income was
$240,306.

personnel and in researching and implementing the SEO campaign to increase sales through the Candelabra website.

According to Wife, she supported the Candelabra website. In fact, she was the one who found the first website builder in 2005 through her connections in Greensboro, North Carolina. And although Husband and a Candelabra employee named Meredith were the first ones to meet with the second website builder, who ultimately helped the parties revolutionize the website, Wife testified, and credibly in our judgment, that she was the decision maker as to the website design and content:

I was the one that sat down and told [second website builder] this is what I think we can do. This is what I think is going to be hard.
Nobody is really doing this in the internet right now with high end design lighting. The designer lighting companies are not getting it yet. They are not putting minimum price points. We ship this one, we're not going to make any money. . . . We started talking about it and weeding it out and what brands we could list and how we were going to structure it. I showed them my Oly model of what I was doing. We changed it up . . . mixing in a few other websites that we liked. I did—I gave them the products. I gave them the words. I gave them the layout.

We find the evidence supports Wife's contention that her design of the website and her decision to create different brand "shops" within the website were inspired by what she learned at Belk and through her experience merchandising clothing.

Wife acknowledged that Husband was in favor of expanding the website and was very helpful in finding people to get the new and improved website going.
However, Wife stated:

I worked on the website [] more with Meredith and more with the [outside website] people than [Husband] ever did. [Husband] talked about it a lot. . . . I will admit he found some key people to help us. But, physically and anything he did himself to put into that website, it was all given to him from the companies that we had hired. And, yes, [] he had helped to find some of the companies. . . . He was reading books [about building websites] all the time. . . . [H]e would also read books on the greatest family man and things like that as well. He read [all sorts of] books all the time. I don't know if he thought when he

read it that that meant he did it. I don't know. But, he read books. I never saw anything that he ever did in reading books come to fruition.

In terms of the development of the website branding over time, Wife further testified:

[Husband] would shoot out a lot of ideas, but he wouldn't work on the ideas. I worked on the ideas. There needed to be timelines. You grow to[o] fast and you can bottom out. There were things we were ready for. There were things we weren't ready for. There was only so much you could do. We couldn't even get the brands that were getting on [the website] at the time to look decent yet.

So in order to make the site grow right, I had a plan. I had brands that were going to be coming on. [Husband] wakes up one morning and decides that there needs to be ten new brands on the website and that's it. That's a done deal. [Wife], we need ten new brands on the website.

. . . .

What we didn't agree on is that [Husband] would come to me and say that we needed to be doing this or that we needed to be doing this, but then he wouldn't do anything and I had to do it. That's what the arguments were on. . . . The website is a very good example. He wanted this great website. There were some people in there that he put into key positions. And, I struggled to do the website, and the front of the store, and everything, and kept it up, and yet he would look at me and say I didn't want the website. But, he wasn't doing anything on the website.

In short, Wife stated, "If Sam Moore had not been my husband, . . . he would have been out [of Candelabra] a long time ago because he didn't do enough to acquire even what a part-time position would do."

In light of our review of the record, we find Husband vastly overstates his contributions to the implementation and management of the website development and that Wife is the party with industry knowledge, design background, and work

ethic that brought the website to fruition. Our careful review of the record convinces us that Husband was a purveyor of ideas, but he left the details of putting his ideas into action to others with a solid work ethic, such as Wife.

F.
Just as Candelabra's sales began to increase, the parties' marriage was crumbling. Husband was frequently enraged, hurling vile and profane insults against Wife and others. After an especially threatening altercation in February of 2011, Wife asked Husband to leave the marital home.

For a brief period, both parties continued working at Candelabra. However, in May 2011, Wife, in her capacity as President and controlling shareholder of Candelabra, terminated Husband's employment. The family court litigation commenced in June of 2011. Since that time, Husband has had no involvement in Candelabra's operations by virtue of the family court's temporary order.

III.
The family court granted Wife a divorce on the grounds of one year's continuous separation and awarded Wife custody of the couple's two children. Neither party was awarded alimony. The primary matter in dispute was the value of Candelabra7 and the parties' requests for attorney's fees and expert witness fees.

As to the value of Candelabra, both parties presented the testimony of highly qualified expert witnesses. Wife's valuation expert, Raymond McKay, an attorney and a certified public accountant, opined that the unadjusted value of Candelabra as of June 30, 2011, was $1,200,000, of which approximately $846,000 represented goodwill. McKay opined that 20–25% of this goodwill value was personal to Wife and that without Wife, Candelabra's sales (and profits) would suffer. McKay also opined that the fair market value of Candelabra was not its full unadjusted value of $1,200,000; rather, McKay testified that value should be discounted by 20% to reflect the illiquidity or lack of marketability of shares of a closely held business such as Candelabra. Accordingly, McKay's ultimate opinion

7 It is undisputed that Candelabra had fixed assets of $353,687 when marital litigation was filed. During the pendency of the appeal, and over Wife's objection, we granted Husband's motion for a disbursement of funds. We ordered Wife to pay Husband the sum of $176,843.50, to be credited against his share of the marital estate.

was that the adjusted fair market value of Candelabra was $960,000 as of June 30, 2011.

By contrast, Husband's valuation expert, Dr. Perry Woodside, valued Candelabra at
$2,960,000 as of June 30, 2012—a date approximately one year after the marital litigation was commenced. Woodside did not calculate personal goodwill as part of his valuation, but conceded on cross-examination that some of the goodwill was personal to Wife, opining that Wife's personal goodwill was perhaps between 5– 10%. Woodside also opined that Candelabra could be sold "fairly readily" so he did not believe it was appropriate to apply a lack of marketability discount.

Relying exclusively on the testimony of Husband's valuation expert, Woodside, the family court utilized a valuation date approximately one year after the commencement of marital litigation and found the value of Candelabra as of June 30, 2012, was $2,960,000, the majority of which was comprised of enterprise goodwill. Specifically, the family court determined that, of the company's overall goodwill, 10% represented Wife's personal goodwill, and as a result that percentage was excluded from the marital estate. The remaining 90%, excluding the fixed assets, constituted enterprise goodwill and was included in the marital estate, for it inhered to the business itself and was unrelated to the individual efforts of any single person.

The family court ordered an equal division of marital assets. The family court granted Wife first option to purchase Husband's interest in Candelabra, including a five-year period to pay Husband his share, together with interest. The family court further ordered Wife to pay Husband $122,557 in expert witness fees.

Both parties appealed. We certified the appeal pursuant to Rule 204, SCACR.

IV.

Wife contends the family court erred in including any goodwill in the value of Candelabra and in awarding Husband $122,557 in expert witness fees. Husband asserts error in the family court allocating any part of the value of Candelabra to Wife's personal goodwill. Husband further claims the family court erred in allowing Wife a five-year period to pay his equitable division share. While substantial valuation questions are presented, the threshold issue is whether and to what extent the enterprise goodwill of Candelabra is a marital asset.

Courts throughout the country, including this Court, have struggled in how to resolve the issue of goodwill value in the domestic relations arena. The family court seeks to achieve equity, yet in the quest for fairness, real world valuation principles are often and purposely ignored. The familiar tension between a family court's goal of equity and recognized valuation principles may be explained, at least in part, due to the absence of a true willing buyer and willing seller in marital litigation. The reality in a family court action is that there is rarely a true sale, for one spouse typically retains the business interest which is the subject of the goodwill valuation and apportionment dispute. Another factor at play is the clear intent not to include future earnings as part of an equitable division award and also order an award of alimony based on those same earnings—in essence, to prevent the inequity of a double recovery. In this regard, one of the common methods of valuing goodwill is by a capitalization of earnings. The various factors and concerns explain South Carolina's categorical rule against the inclusion of personal goodwill in the marital estate. For the first time, we are asked whether enterprise goodwill can be a marital asset subject to division. While we ultimately answer the question in the affirmative, we do so cautiously, knowing that today's decision does not and could not possibly answer the myriad questions that will arise.

A.Goodwill: Personal vs. Enterprise
At trial, the experts agreed that the fair market value of Candelabra's tangible assets as of June 2011 was $353,687. However, the goodwill value of Candelabra, the value above and beyond its tangible assets, was the primary dispute at trial.

In a divorce action, the family court is tasked with identifying, valuing, and apportioning the marital estate. Gardner v. Gardner, 368 S.C. 134, 136, 628
S.E.2d 37, 38 (2006) (citing Johnson v. Johnson, 296 S.C. 289, 293, 372 S.E.2d
107, 110 (Ct. App. 1988)); see also S.C. Code Ann. §§ 20-3-620 to -630 (2014) (defining marital property and setting forth the apportionment factors).

"The unanimous nationwide rule is that a[] [spouse's] ownership interest in a marketable business constitutes property which is subject to classification and division upon divorce." 2 Equit. Distrib. of Property, 3d § 6:72. "The reason is fundamentally simple: the business can be sold for monetary consideration on the open market. . . . [I]ndeed, there are essentially no rights which are transferable for consideration and which do not constitute property." Id.

than the total value of the tangible assets of the business involved.
This difference is due to the fact that the income of a business
depends upon many factors other than its assets. Many of these
factors are transferred along with the business: for example, a convenient location, the reputation of a trade name, or even simply the probability that the old customers will resort to the old place. Because
these factors are transferable, persons who purchase a business upon
the open market are often willing to pay more than the total value of
the business' individual hard assets. This additional element of value
is called goodwill.

2 Equit. Distrib. of Property, 3d § 6:73 (internal quotation marks and footnotes omitted). Goodwill is considered an intangible asset. See Weinberg v. Wallace, 314 S.C. 183, 187–88, 442 S.E.2d 211, 213 (Ct. App. 1994). Thus, once goodwill
is identified as an asset, the question then becomes whether and to what extent such goodwill should be considered a marital asset.

Many courts have recognized that goodwill may be a business asset or it may be a personal asset belonging to an owner-employee. See, e.g., Martin Ice Cream Co.
v. Commissioner, 110 T.C. 189, 207 (1998) (holding that a shareholder-employee's personal relationships amounted to personal goodwill and thus were not properly considered to be corporate assets and explaining "[t]hose personal assets are entirely distinct from the intangible corporate asset of [enterprise] goodwill") (citing MacDonald v. Commissioner, 3 T.C. 720, 727 (1944)).

"Enterprise goodwill is that which exists independently of one's personal efforts and will outlast one's involvement with the business." In re Marriage of Alexander, 857 N.E.2d 766, 769 (Ill. App. Ct. 2006). "Enterprise goodwill 'is based on the intangible, but generally marketable, existence in a business of established relations with employees, customers and suppliers.'" Yoon v. Yoon, 711 N.E.2d 1265, 1268 (Ind. 1999) (quoting Allen Parkman, The Treatment of Professional Goodwill in Divorce Proceedings, 18 Fam. L.Q. 213, 215 (1984)). "[E]nterprise goodwill attaches to a business entity and is associated separately from the reputation of the owners. . . . The asset has a determinable value because the enterprise goodwill of an ongoing business will transfer upon sale of the business to a willing buyer." Wilson v. Wilson, 706 S.E.2d 354, 361 (W. Va.
2010). Many courts have found "[e]nterprise goodwill is an asset of the business and accordingly is property that is divisible in a dissolution to the extent that it

inheres in the business, independent of any single individual's personal efforts and will outlast any person's involvement in the business." Yoon, 711 N.E.2d at 1268– 69 (citations omitted).

"In contrast, [p]ersonal goodwill is associated with individuals." Wilson, 706 S.E.2d at 361. "It is that part of increased earning capacity that results from the reputation, knowledge and skills of individual people." Id. "The implied assumption is that if the individual were not there, the clients would go elsewhere." Business Valuation Resources, LLC, BVR's Guide to Personal v. Enterprise Goodwill 19 (Adam Manson & David Wood eds., 2011) [hereinafter BVR's Guide]. "Accordingly, the goodwill of a service business, such as a professional practice, consists largely of personal goodwill." Wilson, 706 S.E.2d at 361.
"[A]ny value that attaches to a business as a result of this 'personal goodwill' represents nothing more than the future earning capacity of the individual and is not divisible [in a divorce proceeding]." Yoon, 711 N.E.2d at 1269. In the family court setting, future earning capacity based on a spouse's reputation, knowledge and skills—personal goodwill—is considered nonmarketable and thus not property subject to division. See Butler v. Butler, 663 A.2d 148, 156 (Pa. 1995) ("[W]here there has been an award of alimony, . . . to also attribute a value to goodwill that is wholly personal to the professional spouse, would in essence result in a double charge on future income.").

One court noted the distinction as follows: "[w]here goodwill is a marketable business asset distinct from the personal reputation of a particular individual, as is usually the case with many commercial enterprises, that goodwill has an immediately discernible value as an asset of the business and may be identified as an amount reflected in a sale or transfer of a business." Prahinski v. Prahinski, 540 A.2d 833, 843 (Md. Ct. Spec. App. 1988) (citing Wilson v. Wilson, 741 S.W.2d 640 (Ark. 1987); Taylor v. Taylor, 386 N.W.2d 851 (Neb. 1986)). However, "[i]f the goodwill depends on the continued presence of a particular individual, such goodwill, by definition, is not a marketable asset distinct from the individual." Id.

B.Goodwill in South Carolina
This Court first considered whether goodwill should be treated as marital property in Casey v. Casey (Casey II), 293 S.C. 503, 362 S.E.2d 6 (1987) (reviewing a court of appeals' decision involving the valuation and equitable division of a retail fireworks business operated by the husband). Previously, in reviewing the family court's valuation of the fireworks business, the court of appeals commented that "[t]he question of how to handle the goodwill of a sole proprietorship is a

troublesome one," but the court of appeals ultimately concluded goodwill "may constitute a marital asset subject to division." Casey v. Casey (Casey I), 289 S.C. 462, 466, 346 S.E.2d 726, 729 (Ct. App. 1986). On certiorari, this Court reversed, finding "[w]hen the goodwill in a business is dependent upon the owner's future earnings, it is too speculative for inclusion in the marital estate," and noted "[t]he continued success of the [fireworks] business can be attributed largely to Husband's lobbying efforts to keep the sale of fireworks legal in South Carolina." Casey II, 293 S.C. at 504, 362 S.E.2d at 6–7.

In the years since Casey II, this Court has twice examined the issue of whether goodwill constitutes marital property, both in the context of goodwill inherent in professional dental practices. See Dickert v. Dickert, 387 S.C. 1, 7, 691 S.E.2d 448, 451 (2010) (rejecting a claim that the goodwill in the dental practice was enterprise goodwill and thus finding the goodwill was properly excluded from the marital estate); Donahue v. Donahue, 299 S.C. 353, 360, 384 S.E.2d 741, 746 (1989) (reversing family court's division of the goodwill of husband's dental practice because "[t]he very nature of a professional practice is that it is totally dependent upon the professional"). Although these cases seem to hold that goodwill in general is too speculative to be considered a marital asset, upon careful review, the goodwill at issue on the facts of each of these decisions was personal goodwill.8

Today, we recognize enterprise goodwill as marital property subject to equitable division. We continue to hold that personal goodwill, which follows the owner and is entirely dependent on the owner's personal or professional services and skills, is not marital property subject to division. However, we are persuaded that enterprise goodwill, which inheres in the business itself and is transferrable in the market, should be distinguished from personal or professional goodwill.

Accordingly, we elect to follow the emerging majority approach and hold enterprise goodwill is marital property subject to equitable division. See Yoon, 711 N.E.2d at 1272 ("To the extent goodwill is enterprise goodwill, it is divisible.").
We make our decision fully aware of the certainty and ease that would necessarily result from a categorical rule excluding all goodwill from the marital estate. We nevertheless believe that today's decision will better enable family courts to achieve equity in the apportionment of marital estates and will prove to be

8 See also RGM v. DEM, 306 S.C. 145, 410 S.E.2d 564 (1991) (recognizing that the fair market value of a marital business may include value above and beyond the business's hard assets).

workable. See Powell v. Powell, 648 P.2d 218, 223 (Kan. 1982) (explaining the question of whether and to what extent goodwill should be recognized as a marital asset "is, in the final analysis, a public policy issue"). To be sure, identifying,
valuing, and equitably dividing enterprise goodwill will present challenges, as a
practical matter. The fact that enterprise goodwill is intangible will invariably
create differences of opinion as to the existence of enterprise goodwill and its
value. Yet, experts are routinely involved in family court valuation disputes. We
are confident that South Carolina's excellent family court judges are able to
navigate through the myriad issues associated with the identification, valuation,
and division of enterprise goodwill to achieve an equitable result.

C.Distinguishing Personal Goodwill from Enterprise Goodwill
Before we address the specific facts of this case, we take the opportunity to provide further guidance to the bench and bar as to the distinction between personal and enterprise goodwill. Of course, a business may consist of both personal and
enterprise goodwill, as does Candelabra. We emphasize that "before including the
goodwill of a [] business or professional practice in a marital estate, a court must
determine that the goodwill is attributable to the business as opposed to the owner
as an individual." Yoon, 711 N.E.2d at 1269. "If attributable to the individual, it is
not a divisible asset and is properly considered only as future earning capacity that
may affect the relative property division." Id.

"The difference between personal goodwill and enterprise [] goodwill is easy to define conceptually, but sometimes difficult to measure." BVR's Guide at 37.
Further, "not all businesses have goodwill." Gaskill v. Robbins, 282 S.W.3d 306, 311 (Ky. 2009). Thus, "to the extent a business or profession[al practice] has goodwill (or has a value in excess of its net assets) it is a factual issue to what extent, if any, that goodwill is personal to the owner or employee and to what extent it is enterprise goodwill and therefore divisible property." Yoon, 711 N.E.2d at 1270. The spouse claiming that goodwill should be included in the marital estate bears the burden of proving the goodwill at issue is enterprise goodwill and, thus, is properly considered marital property. Cf. Bodkin v. Bodkin, 388 S.C. 203, 225, 694 S.E.2d 230, 242 (Ct. App. 2010) (noting the spouse claiming property is part of the marital estate bears the burden of proof) (citation omitted).

Although, the presence and extent of personal or enterprise goodwill depends on the facts and circumstances of each case, there are numerous factors that can be examined to help identify the existence and extent of personal or enterprise goodwill. BVR's Guide at 91. First, the type of the business being valued can

often indicate the existence of personal or enterprise goodwill. Id. at 239. For example, an important factor is whether the business involves the manufacture or sale of goods, which can indicate enterprise goodwill, or whether the business involves delivering highly skilled or personal services, which may indicate personal goodwill. Id. at 87. Moreover, the nature or attributes of the particular industry may also impact the goodwill analysis; for example, "[d]entists have close contact [with their patients], [but] radiologists do not." Id. at 86. It is also important to consider how customers are drawn to the business, including whether customers return/repeat their business or whether transactions are largely non- recurrent and whether new business comes primarily from customer referrals or from advertising. Id. at 239. As to the company itself, factors to consider include whether the company is a start-up or a well-established business; whether the business has its own name or is named after an owner; the number of owners; and whether the operating systems and procedures are in-place or still in the process of being established. Id. In ascertaining whether any personal goodwill exists, it is also important to consider the personal characteristics of the owner, including the owner's personal reputation, community visibility, age and health, work habits, as well as the owner's education, experience in the industry, judgment, ability, and special skills or talents. Id. We underscore that this list of factors is not exhaustive or exclusive, but rather is included merely as a starting point to guide the family courts' inquiry. See Crossland v. Crossland, 408 S.C. 443, 453, 759 S.E.2d 419, 424 (2014) ("Formulaic principles and bright-line rules will only hinder the ability of family court judges to reach an equitable result in this individualized, fact- intensive area of law.") (quoting Rimer v. Rimer, 361 S.C. 521, 527, 605 S.E.2d 572, 575 (Ct. App. 2004)).

In separating personal and enterprise goodwill, the essential question is: can the
business generate revenue from continued patronage without the current owner's
participation? BVR's Guide at 239. We believe the following chart, which we have adapted from BVR's Guide, may be helpful in distinguishing personal and enterprise goodwill.

Personal Goodwill Indicators
Enterprise Goodwill Indicators

Small entrepreneurial business highly dependent on employee owner's personal skills and relationships.
No employment agreement between company and employee- owner.

Larger business, which has formalized its organizational structures and institutionalized its systems and controls.
Owner-employee has employment agreement with company.

Personal service is an important

The business is not heavily

selling feature in the company's
dependent on personal services.

product or services.

The business has significant

No significant capital investment

capital investments in either

in either tangible or identifiable
tangible or identifiable intangible

tangible assets.
assets.

Only employee-owners own the

The company has more than one

company.
owner, some of whom are not

Sales largely depend on the employee-owner's personal

employees.

Company sales result from name

relationships with customers.
recognition, sales force, sales

Product and/or services know how and supplier relationships

contracts and other company- owned intangibles.

rest primarily with the employee

Company has supplier contracts

owner.
and formalized production

methods, patents, copyrights,

business systems, etc.

See id. at 334.

Another factor in distinguishing between personal and enterprise goodwill is the degree to which a purported purchaser would demand the seller enter into a covenant not to compete. While a covenant not to compete may be present in any transaction, the market-driven necessity for a covenant is manifest where personal goodwill is involved.

In our research, we came across the following example, which we believe illustrates in a straightforward manner the essential difference between personal and enterprise goodwill based on the concept of marketability/transferability:

To highlight the differences between these two components of goodwill, consider the following example of two hypothetical beauty salons, "Hair Now" and "Salon Pecan." The two salons, located a mile apart, have virtually identical ownership structures, assets, liabilities, revenues and net income. Beyond those similarities, the salons have little in common.

Hair Now is at a busy intersection and serves customers on a walk-in basis. Profits are split evenly among the owners. In contrast, Salon

Pecan is in a secluded neighborhood and requires customers to make appointments, often weeks [in] advance, with a particular stylist.
Profits are allocated based on the revenue generated by each owner.

Although both salons produce virtually identical benefits for their respective owners, there is a difference in the nature of the goodwill of Hair Now's owners versus that of Salon Pecan's owners. The owners of Hair Now receive earnings tied directly to the enterprise, such as its location, business model and mechanism for distributing profit. The owners of Salon Pecan, however, receive earnings tied directly to their personal skills, reputation and repeat clientele. Thus, an owner of Hair Now would typically possess a higher level of enterprise goodwill, and a Salon Pecan owner would have a higher level of personal goodwill.

In a business sale, a Hair Now owner would likely find it easier to transfer to a prospective buyer the goodwill associated with her ownership interest, due to the expectation that the earnings of Hair Now would continue at historical levels regardless of who was working in the business. However, an owner of Salon Pecan would likely have a harder time transferring her goodwill, due to the expected decline in earnings from the regular clients who are more loyal to her than to the salon.

Kotzin Valuation Partners, Personal Goodwill vs. Enterprise Goodwill (March 2009), available at http://www.kotzinvaluation.com/articles/goodwill.htm.

In the above example, the value of each beauty salon may be comprised of both personal and enterprise goodwill. However, any reasonable valuator would unquestionably conclude that personal goodwill predominates in Salon Pecan and enterprise goodwill predominates in Hair Now. For family court equitable division purposes, while distinguishing between enterprise and personal goodwill may at times prove to be difficult, the distinction between personal and enterprise goodwill based on transferability provides a workable framework for determining inclusion in, or exclusion from, the marital estate.

D.Percentage of Goodwill Personal to Wife
Turning to the facts of this case, both parties challenge the family court's determination that 10% of the goodwill in Candelabra was personal goodwill

attributable to Wife. Wife claims the family court erred in understating her personal goodwill as only 10% of the total goodwill and contends that at least 25% of Candelabra's goodwill is personal to her. Husband counters that the family court erred in finding 10% of the total goodwill was personal to Wife because personal goodwill manifests itself only in professional practices, which Candelabra is not. Alternatively, Husband argues that if a portion of the goodwill is personal to Wife, because 80% of Candelabra's revenue is generated through sales from the website (which is not associated with Wife personally), then only the remaining 20% of sales generated in-store could be subject to any personal goodwill consideration.

As noted, Wife's valuation expert, Raymond McKay, opined that "at least" 20– 25% of Candelabra's goodwill is personal to Wife. In reaching this conclusion, McKay collected data from the business records, visited the storefront in Mt.
Pleasant, interviewed Wife and other Candelabra employees, and prepared a detailed report of the history of Candelabra's operations and pertinent financial information, along with discussions of various accounting and valuation methods and several issues surrounding the value of Candelabra's goodwill. In his valuation report, McKay explained that the factors supporting the existence of Wife's personal goodwill included: Wife's total responsibility for day-to-day management of the business; total control and responsibility for ongoing product selection; Wife's continuing website monitoring, revision, and presentation; Wife's direct personal contact and dealings with manufacturers and vendors; and Wife's formal, degreed college training in products marketing (with a minor in business administration), along with her extensive previous retail experience. McKay testified that without Wife, Candelabra would not have the ongoing ability to offer a current mix of trendy products and that sales would decline. McKay further opined that no bona-fide third-party purchaser would pay full fair market value for Candelabra without requiring a covenant not to compete from Wife, which signaled the existence of personal goodwill attributable to Wife.9

9 Other courts have found the necessity of a covenant not to compete signals the existence of personal goodwill. See, e.g., Schmidt v. Schmidt, 120 So. 3d 31, 33 (Fla. Dist. Ct. App. 2013) ("When valuing the enterprise goodwill of a business, the necessity of a covenant not to compete is significant as it signals the existence of personal goodwill, which cannot be included in determining the value assigned to the business for purposes of equitable distribution." (citations omitted)).

Wife's second valuation expert Jay Fishman, a nationally recognized expert on the valuation of closely held businesses, testified as to both the existence and extent of Wife's personal goodwill. Fishman explained that the value of any company is a function of what drives sales/profits in the specific way a particular business operates. After studying Candelabra's financial documents, conducting a thorough examination of Candelabra's website and several competitors' websites, and extensively interviewing various employees, vendors, and suppliers, Fishman concluded that the two major factors driving Candelabra's business were its website/internet presence and its desirable, on-trend product mix selected by Wife. Fishman also testified that, to a lesser extent, Candelabra's value is also attributable in part to its reputation for good customer service and its existing relationships with vendors and suppliers; however, Fishman identified product selection and accessibility on the internet as the most significant factors that drive the value of Candelabra. Fishman emphasized that the design/layout of the website and the product selection the site features are the critical elements that positively differentiate Candelabra from other retailers, prompting customers to purchase from Candelabra instead of another online retailer. Fishman emphasized that this differentiation is critically important when selling non-exclusive product on the internet like Candelabra does because "the competition is fierce [and] the barriers to entry here are rather low."10

Husband's valuation expert was Dr. Perry Woodside, who is also a superbly qualified expert in the field of business valuation. In researching how Candelabra's business operates, Woodside interviewed only Husband and did not visit the store or interview Wife or any other Candelabra employees. Woodside did not calculate personal goodwill as part of his valuation; however, on cross-examination, he candidly acknowledged that there was "some" personal goodwill in Candelabra but stated that it was "difficult to know" and if pressed to quantify it, then it would be between "5 to 10%." It was this opinion testimony from which the family court assigned Wife's personal goodwill at 10% of the value.

10 Regarding Husband's contention that anyone could take over Wife's position at Candelabra and experience the same success, Fishman stated:

That's a field of dreams. Businesses don't work that way. If you could do that, everybody would do it. . . . [Businesses] have to figure out a way. What differentiates me from the competition and [here] I think it's product selection, customer service, all those things,
okay. . . . [I]t's [ludicrous] to think you can build this up, have someone else in there who is not really trained, and prosper.

We find the undisputed evidence is that some of the goodwill value was personal to Wife, especially in view of Woodside's acknowledgement that some personal goodwill existed. The evidence in the record as to Wife's role and involvement in the business, particularly in the area of product selection and format/design of the website, supports the conclusions of McKay and Fishman. Indeed, Wife's testimony was corroborated by that of current and former Candelabra employees and vendors who testified as to the significance of Wife's personal contributions to the business and the impact her unique talents and creativity had on the business. One employee even quipped that if Wife left, "it wouldn't be Candelabra. Whitney is Candelabra."

We reject Husband's contention on appeal that it is only through professional practices (such as doctors, dentists, accountants, attorneys, etc.) that a spouse can develop personal goodwill. See Ward, 755 S.E.2d at 500–01 (affirming family court's determination that one-third of husband's interest in logging business, which operated under the trade name of Advantage Timberland, Inc., was personal to husband and not enterprise goodwill where Husband possessed key personal relationships with employees and government regulators and performed his duties with exceptional skill and efficiency); see also Hough v. Hough, 793 So.2d 57, 58 (Fla. Dist. Ct. App. 2001) (affirming the family court's finding that 100% of goodwill in parties' business which owned and operated coin-operated air and vacuum machines on the premises of convenience stores and service stations was husband's personal goodwill because the company derived a large portion of its income from a handful of accounts that were freely or easily terminable by the customers and depended on husband's store of personal goodwill); McQuay v.
McQuay, 217 P.3d 162, 164 (Okla. Civ. App. 2009) (reversing the lower court's inclusion of goodwill in the marital estate where the goodwill in the parties' concrete business was entirely attributable to husband's good reputation as a cement mason); In re Marriage of Maxwell, 876 P.2d 811, 813 (Or. Ct. App. 1994) (finding all goodwill in self-employed advertising copywriter's sole proprietorship was personal because the continued success of the business is completely dependent on the creative, personal services he provides).

In so finding, we acknowledge that several circumstances surrounding Candelabra's website indicate the presence of enterprise goodwill. First, the website's domain name, www.shopcandelabra.com, is associated with the business itself and is not specific to or associated with Wife personally. Cf. George Hawkins, Personal Versus Practice Goodwill: A Visit to the "Plastics" Doc, Fair Value, Vol. XX, No. 2, Summer/Fall 2013, at 5 (noting website or domain names

that are person-specific or promote an individual are not easily transferrable and suggest personal goodwill). Further, in connection with Candelabra's shift in business strategy, the website that initially began as a minor feature of Candelabra's overall marketing strategy was transformed into the central feature of all business operations, now serving as the online portal through which approximately 80% of all sales are placed. Indeed, all three experts agree that Candelabra's internet presence, through the SEO campaign and website format and functionality, significantly drives Candelabra's sales and overall value as a business. See id. at 4 (noting mass- and web-driven marketing strategies indicate enterprise goodwill).

Nevertheless, we categorically reject Husband's suggestion that because 80% of sales occur through the website, that somehow only 20% of Candelabra's value is attributable to in-store sales and is at play in determining personal goodwill.
Husband cites no authority for the proposition that the presence of a website and internet sales precludes a finding of personal goodwill. To the contrary, the evidence establishes the presence of Wife's personal goodwill in the website in that Wife is solely responsible for the design and layout of the website and for selecting product to be featured on the website. See In re Marriage of McTiernan & Dubrow, 35 Cal. Rptr. 3d 287, 304 (Cal. Ct. App. 2005) (Boland, J., concurring) (explaining that artistic or creative talents are inherently personal and cannot be considered a divisible marital asset). Moreover, as Fishman noted in his testimony, appearing relevant to search engines such as Google through SEO strategies does not automatically translate into sales and profits if the website does not feature the product customers are looking to buy or is not structured in a way that customers can find the product they are looking for; rather, it is Wife's creative direction as to the website layout and her eye for design in picking products that convert Internet shoppers from mere visitors into purchasing customers.

Given our review of the record as a whole, we find the family court erred in finding only 10% of Candelabra's goodwill is personal to Wife. We assign 20% of the goodwill value to Wife's personal goodwill. We find support for this value in the testimony of McKay, who thoroughly studied and analyzed the issue and whose judgment on the matter we find most persuasive.

Wife argues we should dismiss Woodside's opinion because of the pressure Husband exerted on Woodside to value Candelabra as high as possible. We understand the games that are played in family court in the valuing of marital assets: the spouse expecting to receive an asset wants the asset valued as low as possible while the spouse not receiving the asset wants the asset valued as high as

possible. We further recognize in this case that Husband attempted to play this game, as evidenced by the series of emails he sent to Woodside imploring Woodside to assign a high value to Candelabra. In one email, Husband provided documents to Woodside and observed, "I am confident this material will continue to help build our valuation of Candelabra." In another email to Woodside, Husband stated, "You are the only offense I have. Let's keep the wheels turning and get me the value [I am] deserving for a company with this type of opportunity."

We are persuaded that Woodside, a highly respected expert, did not succumb to Husband's pressures. In fact, Husband admitted he argued with Woodside concerning a "multiplier" and "I fought him on it and he didn't give in." Therefore, we reject Wife's contention that we summarily dismiss the Woodside valuation.
While we ultimately adopt most of the McKay valuation, we have carefully considered and respect the Woodside valuation. In fact, we accept Woodside's view that a marketability discount should not be utilized in valuing Candelabra. We add that a factor in our acceptance of most of the McKay valuation is the date of litigation value, which only McKay produced in a timely manner, a matter we discuss below.

E. Date of Valuation
By statute, marital property subject to equitable distribution is presumptively
valued at the date of the divorce filing. S.C. Code Ann. § 20-3-630(A). Nevertheless, the parties may be entitled to share in any appreciation or
depreciation in marital assets occurring after the commencement of marital
litigation but before the final decree. Burch v. Burch, 395 S.C. 318, 325, 717 S.E.2d 757, 761 (2011) (citation omitted). The burden of proof is on the party
seeking a deviation from the statutory filing date. Id. at 329, 717 S.E.2d at 763.

In South Carolina, family and appellate courts look to whether there has been
active or passive appreciation or depreciation of the marital assets when
determining the proper date for valuation. Id. at 325, 717 S.E.2d at 761. "Passive
appreciation refers to enhancement of the value of property due solely to inflation,
changing economic conditions, or market forces, or other such circumstances
beyond the control of either spouse." Id. at 325–26, 717 S.E.2d at 761 (emphasis added) (quotations and citation omitted). "[A]ctive appreciation, on the other
hand, refers to financial or managerial contributions of one of the spouses." Id. at 326, 717 S.E.2d at 761 (quotations and citation omitted).

In valuing Candelabra, the family court found that although the date litigation commenced was in June 2011, the proper date for valuing Candelabra was June 2012. The family court reasoned that the growth of the business during the pendency of the litigation was due to the passive "market force of the internet." Moreover, the family court took a more generous view of Husband's contributions to the business than we do.

Even assuming Husband, as the family court found, "buoy[ed]" the "sinking ship" of Candelabra, such efforts occurred before the marital litigation was commenced. Husband was terminated from Candelabra prior to the filing date, and thereafter, by virtue of the temporary order, he was prohibited from making any decisions affecting the company. Because only post-filing activities impact the analysis of the active-passive distinction, we find Husband's actions prior to the filing date do not support a June 2012 valuation date. See Burch, 395 S.C at 327–28, 717 S.E.2d at 762 (noting that where the parties dispute the valuation date of a marital asset that has appreciated after the marital litigation filing date, only the spouses' post- filing activities matter in evaluating whether post-filing appreciation was active or passive and finding husband's post-filing activities in attending two trade shows did not amount to active efforts).

Further, it is not faithful to the record to attribute the success of Candelabra's website sales to mere "market forces" or existence of the internet. Rather, the evidence demonstrates that the continued growth in Candelabra's business between June 2011 and June 2012 was primarily attributable to Wife's active and continuing managerial efforts in selecting and arranging product on the website, in continuing to revise and refine the SEO campaign as to existing brands, and in expanding the SEO campaign to include new brands on the Candelabra website.11

Husband admitted the changing nature of Candelabra's business and acknowledged the importance of ongoing, active management for growth. Wife's valuation expert McKay outlined the distinction between active and passive changes in value and opined that the increase in Candelabra's value after the filing date was due to active forces, including Wife's managerial oversight, product selection, and marketing.
We agree and find that the increase in Candelabra's value between June 2011 and

11 The evidence in the record reveals that the website requires much more ongoing maintenance than the physical storefront; the SEO keywords are monitored, optimized, and indexed on a weekly or daily basis.

June 2012 was the result of Wife's active efforts. Husband has thus failed to meet his burden of proving that the post-filing appreciation of Candelabra was due to passive forces.

As a result, we adhere to the statutory valuation date: the date of filing. In this case, the valuation date closest to the filing date is June 30, 2011.

F. Principles of Valuation
"When valuing business interests for the purpose of equitable distribution, the
family court should determine 'the fair market value of the corporate property as an
established and going business.'" Reid v. Reid, 280 S.C. 367, 373, 312 S.E.2d 724,
727 (Ct. App. 1984) (quoting Santee Oil Co. v. Cox, 265 S.C. 270, 273, 217 S.E.2d 789, 791 (1975)). "This is to be accomplished by considering the business' net
asset value, the fair market value for its stock, and earnings or investment value."
Id. (quotations and citations omitted).

The family court entered a scheduling order prior to trial, which required, among other things, the completion of written discovery in June 2012; the completion of mediation in July 2012; and the completion of depositions in August 2012; and set September 17, 2012, as the date of trial. At the time of Woodside's deposition in August 2012, he was asked his opinion of Candelabra as of the 2011 date of filing. Woodside had no opinion, for he only valued the business as of June 2012. In short, for reasons we do not understand, Husband ignored the statutory valuation date. Apparently in response to the deposition inquiry, Woodside at the last minute (a couple days before trial) produced a June 2011 valuation. Husband offers no reason for failing to timely provide the date of filing valuation.

Wife asserts this violation of the scheduling order leaves only McKay's date of filing valuation for the family court and this Court to consider. While Wife makes a compelling argument, we need not reach the question of the admissibility of Woodside's tardy date of filing valuation, for we would in any event adopt in large part the McKay valuation.

McKay considered in exacting detail the history of the company, examined the value of Candelabra from all approaches,12 and balanced his opinion after weighing

12 Guided by this Court's opinion in Santee Oil Co., McKay considered the adjusted net asset value, the excess earnings method, the capitalized earnings method, the discounted future benefits method, and the market approach and

the appropriate factors. We do adopt a central feature of Woodside's analysis—the inappropriateness of using a lack of marketability discount in this case.13 We
decline to impose a bright line rule regarding the appropriateness of such discounts
in all family court business valuations, but we find no justification for discounting
the value of Candelabra in this case due to lack of marketability. Because Wife will retain ownership of Candelabra, we see no legitimate reason to indulge in the fiction of a marketability discount.14 See Fausch v. Fausch, 697 N.W.2d 748, 752– 53 (S.D. 2005) ("Whether or not it is fair or appropriate to apply a [marketability] discount in a divorce case where no immediate sale is contemplated is . . . based upon the evidence of the case.") (citations omitted).

weighted each as to their relative bearing upon the value of the closely held company. We believe this approach is most consistent with existing jurisprudence regarding valuation of closely held businesses. See Belk of Spartanburg, S.C., Inc. v. Thompson, 337 S.C. 109, 116, 522 S.E.2d 357, 361 (Ct. App. 1999) (stating "[i]n Santee our supreme court determined three factors were ordinarily to be considered in a stock valuation case: (1) net asset value, (2) market value, and (3) the earnings or investment value of the dissenting stock. After these factors have been considered, each is then weighted as to their relative bearing upon the ultimate determination of the fair value of the dissenting stock," and discounting the significance of appraisals that did not utilize all three methods or engage in weighting) (citing Santee Oil Co., 265 S.C. 270, 217 S.E.2d 789). While a
traditional approach to valuation may often be dispositive in a family court setting,
we recognize that flexibility must exist to allow our family court judges (and
appellate courts under de novo review) discretion to fashion equitable relief under
the facts and circumstances presented.

13 The lack of a marketability discount was part of Woodside's June 2012 valuation and was in compliance with the scheduling order. We also note that Wife's second expert, Fishman, also opined that he did not believe it was appropriate to apply a discount for a lack of marketability in determining Candelabra's value because there were no "exceptional circumstances" that would warrant such a discount, particularly where there was no contemplated sale of the business.

14 McKay in his report noted the often-made argument that "since a sale of the company is not anticipated as a consequence of most divorce litigation, no [marketability discount] should apply." McKay opted for a marketability discount,
and understandably so, in his faithful adherence to the concept of "fair market
value." We do not address, and leave for another day, other discounts generally
associated with determining fair market value.

G.Apportionment of Candelabra
Equitable distribution of marital property "is based on the recognition that marriage is, among other things, an economic partnership." Morris v. Morris, 335 S.C. 525, 531, 517 S.E.2d 720, 723 (Ct. App. 1999). "Upon dissolution of the marriage, marital property should be divided and distributed in a manner which fairly reflects each spouse's contribution to its acquisition, regardless of who holds legal title."
Id. Section 20-3-620(B) of the South Carolina Code provides factors for the family court to consider in apportioning marital property and instructs the family court to "give weight in such proportion as it finds appropriate" to each of the following factors:

(1) the duration of the marriage together with the ages of the parties at the time of the marriage and at the time of the divorce . . . ; (2) marital misconduct or fault of either or both parties . . . ; (3) the value of the marital property . . . ; (4) the income of each spouse, the earning potential of each spouse, and the opportunity for future acquisition of capital assets; (5) the health, both physical and emotional, of each spouse; (6) the need of each spouse or either spouse for additional training or education in order to achieve that spouse's income potential; (7) the nonmarital property of each spouse; (8) the existence or nonexistence of vested retirement benefits for each or either spouse; (9) whether separate maintenance or alimony has been awarded; (10) the desirability of awarding the family home . . . ; (11) the tax consequences to each or either party . . . ; (12) the existence and extent of any support obligations, from a prior marriage . . . ; (13) liens and any other encumbrances upon the marital property . . . ; (14) child custody arrangements and obligations . . . ; and (15) such other relevant factors as the trial court shall expressly enumerate in its order.
S.C. Code Ann. § 20-3-620(B).

We find the most relevant apportionment factors in this case are: (1) Wife and Husband are in good health; (2) Wife and Husband are educated, able-bodied individuals, with many future years of strong earning potential, along with the corresponding absence of the need for separate maintenance or alimony; (3) Wife's disproportionately greater contributions towards enhancing the business of Candelabra by focusing her efforts on establishing lasting relationships and

ensuring long-term growth and stability, in addition to serving as the children's primary caregiver; (4) Wife being awarded full custody of the couple's two minor children; and (5) Husband's frequent rages, which although not the ultimate basis for the divorce, nonetheless contributed to the breakup of the marriage.

We have carefully considered these and all factors, and while awarding a greater share of the marital estate to Wife could be justified, we see no reason to set aside the family court's equal division of the marital estate. We, therefore, affirm the family court on the equal division and deny Wife's request for a greater share of the marital estate.

H.The Value of Candelabra
Having set forth the analysis for the inclusion of enterprise goodwill in the marital estate, for an equal division of the value of Candelabra, and for the adoption of the McKay date-of-filing valuation, together with Woodside's proposal concerning the exclusion of a marketability discount, we set forth the value and establish the procedure for Wife to pay Husband for his remaining interest in the business.

As of the date marital litigation was filed, Candelabra had a value of $1,200,000. Subtracting from that figure the value of Candelabra's hard assets, which was
$353,687,15 we arrive at the value of Candelabra's goodwill, which is $846,313. Only 80%, or $677,050, of the overall goodwill value is enterprise goodwill includable in the marital estate. Thus, only $677,050 is a divisible marital asset, and Husband's 50% share of such enterprise goodwill is $338,525. Wife shall pay
$338,525 to Husband together with interest at the rate directed by the family court. Interest shall be calculated from the date of the family court final decree.

Husband assigns error to the family court granting Wife five years to purchase Husband's interest. We agree and order that if Wife elects to retain ownership of the business, she shall make payment in full to Husband within ninety days from the sending of the remittitur to the family court.

15 As noted, this Court has previously ordered Wife to pay Husband $176,843, which represented his 50% share of the hard-assets value.

V.
We address the final assignments of error in summary fashion. Given our disposition of the value of Candelabra, we reverse the award to Husband of his expert witness fees.16 While an appellate court retains the right to remand an award of fees and costs in light of changed beneficial results on appeal, we decline to order a remand in this case for the sole purpose of revisiting the expert witness fee award. Compare Rogers v. Rogers, 343 S.C. 329, 334, 540 S.E.2d 840, 842 (2001) (noting that in light of the remand on the substantive matter, the issue of attorney's fees was also remanded for reconsideration), with Myers v. Myers, 391
S.C. 308, 322, 705 S.E.2d 86, 94 (Ct. App. 2011) (modifying the family court's award of attorney's fees to Wife where the appellate court's decision diminished the beneficial results to Wife, rather than remanding to the family court). As a result, Wife shall not be responsible for any part of Husband's expert witness fees.

Husband argues that because Wife desires to retain ownership of Candelabra, she forfeited her ability to challenge the family court's value on appeal. Husband advances the "acceptance of benefits" doctrine in support of his position.
Succinctly stated, the doctrine provides that when a party voluntarily accepts benefits provided to him under a decree, such acceptance acts as a waiver of his right to challenge the benefit on appeal. See 4 C.J.S. Appeal & Error § 62 (2007) ("Under some authority, voluntary compliance with a court's judgment moots appellate review, such as when an appellant accepts the benefits of or acquiesces in the judgment . . . ."). The doctrine does not apply here to foreclose Wife's ability to challenge the family court value on appeal. See id. ("However, it has also been held that voluntarily complying with a court order does not render an appeal moot. An appeal of a judgment is not rendered moot by a voluntary act that moots part of a claim, where the issue of liability or damages still remains.") (footnotes omitted); see also 5 Am. Jur. 2d Appellate Review § 587 (2007) ("[I]n order to be barred from appealing, a party must accept the benefits of the judgment under circumstances which indicate an intention to finally settle and compromise disputed claims."). This Court and the court of appeals routinely address such valuation challenges. The suggestion that a spouse in family court litigation who is16 Doe v. Doe, 370 S.C. 206, 220, 634 S.E.2d 51, 59 (Ct. App. 2006) (noting "[t]he
same considerations that apply to awarding attorneys' fees also apply to awarding litigation expenses" and reversing the family court's award of expert witness fees) (citing Ellerbe v. Ellerbe, 323 S.C. 283, 298, 473 S.E.2d 881, 889 (Ct. App.1996)).awarded an asset has somehow waived the ability to challenge the asset's value on appeal borders on frivolity. We dispose of Husband's argument under Rule 220, SCACR, as manifestly without merit.

The order of the family court is affirmed in part and reversed in part.

ART, REVERSED IN PART.

TOAL, C.J., BEATTY and HEARN, JJ., concur. PLEICONES, J.,
concurring in result only.

Known Unknowns in Business Valuations Or
Why Settling a Business Valuation Dispute Early May Be a Good Idea
George W. DuRant, CPNABV, ASA, CFF

I. Business valuation disputes arise every day and everywhere

    A. Divorce (marital or business)

    B. Disability, Retirement or Death

    C. Business Strategy or Tactics

II. Fair Market Value is not always a good think.
   A. Fair Market Value is generally defined as:
The price, expressed in terms of cash equivalents, at which property would change hands between a hw;othetical willing and able buyer and a hypothetical wi/Ung and able selle1; acting at arms-length in an open and unrestricted market, when neither is under compulsion to buy or sell and when both have reasonable knowledge of the relevant facts. (International Glossa1y of Business Valuation Terms)

   B. Discounts for lack of marketability and lack of control. It is intuitive that:

investors (hypothetical willing and able buyers) prefer and will pay more for liquid shares than for illiquid shares; and
investors (hypothetical willing and able buyers) prefer and will pay more for shares that convey the rights to control a corporation than for shares that do not.
Proving (reliably) the amount of discounts appropriate under case specific facts and circumstances is not so easy.
A frequent criticism of the fair market value standard is that it does not match reality; i.e. the actual involved buyer and sellers had no intention of buying or selling the subject business interest, except for .... Although it is clear that business value must be determined on a going concern basis, it is sometimes less clear why a sale or liquidation assumption is appropriate for the business interest itself (unless sale or liquidation is imminent or likely).
Another criticism of the fair market value standard is that the definitional buyer and seller are assumed to be hypothetical persons who are proxies for the whole market of willing buyers and sellers. Accordingly, fair market value is determined without regard to peculiarities of the actual owner or any particular purchaser. For example, the fact that a spouse has no intention of selling the interest (which is the typical situation in a divorce) may not be a relevant consideration in a fair market value determination.

Fair value is not fair market value - maybe; but, fair value may not be what you think it is
1. fair value is an equitable concept of value. What seems fair under the particular facts and circumstances?
2. fair value means "intrinsic value"1
3. In finance, intrinsic value or/air value refers to the value of a company, stock, currency or product determined through fundamental analysis without reference to its market value. It is ordinarily calculated by summing the discounted future income generated by the asset to obtain the present value.2
4. The key difference between fair value and fair market value is that fair value is perceived more from the perspective of the actual owner and the most likely purchaser of a business interest rather than a hypothetical, typically motivated buyer and seller. The determination of fair value can take personal characteristics of the known buyer and seller into consideration whereas any such unique characteristics are sometimes ignored in determining fair market value and sometimes they are not ignored.3

Valuation Date can be a moving target

Choice of date is important because information and facts becoming known or knowable only after the valuation date is speculative as of the valuation date.
Many cases indicate that the appropriate or correct valuation date is the date fairest to the parties under case specific facts and circumstances.4
1. Dissenter's rights: §33-13-101(3) provides for valuation as of the date immediately before the effectuation of the corporate action to which the dissenter objects.

Oppression- maybe the date of trial, maybe some other more appropriate date (maybe a day prior to the time an oppressive shareholder did something to damage value of the stock.
Equitable distribution - generally the date litigation is filed- but not necessarily (active and passive patiicipation).

Not all valuation approaches are created equal; and, circumstances do matter

A.Under the weight of authority the .three majorfactors to be considered are: (I) net asset value; (2) market value; and (3) the eamings or investment value of the dissenting stock. (Santee Oil)

The net asset value (NAV) approach simply adds up the fair market value of all discrete

3 Fields v. Fields, Opinion No. 3230, 2000 S.C. App. LEXIS 146, July 21, 2000 involved the valuation of husband's 18% interest in a family corporation. Valuation experts for both spouses testified to the appropriateness oflack of control discounts under the assumption of a market transaction. The court focused on value from the perspective of the spouse as a family member and attributed family control of the corporation to the otherwise non-controlling interest. Thus, no adjustment for lack of control was allowed, a clear departure from the common concept of fair market value. Although some will interpret Fields as the turning away point for the family court's reliance upon fair market value as the standard of value for closely held interests, a better interpretation may be that Fields only demonstrates the court's reluctance to rigidly adhere to a standard which produces an inequitable result under specific facts.

4 In Hendley v. lee,676 F.Supp.1317; 1987 U.S. Dist. LEXIS 13290, (a case involving corporate deadlock), the court determined the purchase price ofa 50% stock interest as of the date ofttial. In considering other valuation dates, such as the date litigation commenced, the court determined that no other date was more significant or equitable than the date of trial. The court stated, "the ultimate issue is what is fair between the parties in each case.
"assets and subtracts debt as of the valuation date. This approach is best used in valuations conducted at the entity level and involving (1) investment or real estate holdings and (2) situations where business is appraised other than on a going concern basis (liquidation purpose or purchase price allocation or when assets are non-operating). If a company owns a lot of intangible assets, the NAV approach may produce a point of reference but not a ve1y good indication of enterprise value unless the intangibles are susceptible to discrete valuation.
Nevertheless, the net asset value approach should be considered a required approach in all types of South Carolina valuation cases.

Under the market approach, value is estimated by looking at the prices of comparable or guideline securities relative to a common variable such as earnings, cash flows, book value, or sales revenue. For examples:

Price/ Earnings (P/E Ratio) Price/ Net Cash Flow
Price/ Revenue (often used to value small companies) Price/ Book Value

The theory behind the earnings approach is that closely held business value equals the

present value of future earnings, where earnings is understood to mean cash flow and capital appreciation. When business operations are stable and expected to remain so, historical earnings may be the best predictors of future earnings. For a new business or a business in the midst of instability, historical earnings may have little relationship to future earnings; and the forecasting necessarily becomes more complex.

Enterprise v. Personal Goodwill -Moore v. Moore, 779 S.E.2d 533 (SC 2015)

What Carnac the Magnificent' and the valuation of a start-up business have in collllnon

Choose your business valuation expert carefully.

5 Camac the Magnificent was a recurring comedic role played by Johnny Carson on The Tonight Show Starring Johnny Carson. One of Carson's most well-known characters, Carnac was a 11mystic from the East11 who could psychically 11divine11 unknown answers to unseen questions. The character was introduced in 1964.(1] As Carnac, Carson wore a large feathered turban and a cape. The character would emerge from behind the show's cm1ain accompanied by Indian music, and make his way towards the desk, where he would invariably stumble on the step in front of the desk and lose his balance. On one occasion frequently rebroadcast on anniversary shows, Carson's desk was replaced with a lightweight balsa-wood version; this allowed Carson to trip and smash through it.

The most valuable damage expe1t witness is the one who can dazzle the jmy with a biased opinion that far exceeds the bounds of what can be reasonably extrapolated from the evidence and thereby help a client obtain an mtjust award.

CREDIBILITYTo win, we must be believed
To be believed, we must be believable
To be believable, we must tell the truth... Gerry Spence
or This
The most valuable expert witness is the one who can maximize the client's just interest by communicating and defending a reasoned opinion developed from application of reliable principles and methods to sufficient facts or data.

Opinion testimony is truthful if developed by applying reliable principles and methods to sufficient facts or data.

Finally, with regard to the opposing valuation expe1t, you must expose her:

misunderstandings about the facts and circumstances,
unreasoned assumptions about the past, present, and future,
misuse of generally accepted valuation methodology, and
mathematical errors.

Judge Robert S. Armstrong: Civility as it Relates to the Profession

Judge Robert Armstrong
CIVILITY AND PROFESSIONALISM

SOURCES

Case Law
The Florida Bar v. Jeffrey Alan Norkin, 132 So.3d 77 (2013)
Grievance Administrator v. Fieger, 719 N.W.2d 123
In Re Harvey L. Golden, Opinion No. 24747, Filed January 19, 1998
In Re Daniel F. Norfleet, Opinion No. 25803, Filed April 12, 2004
In Re William Grayson Ervin, Opinion No. 26816, Filed May 11, 2010
In Re William Gary White, III, Opinion No. 26939, Filed March 7, 2011
In Re Anonymous Member of the South Carolina Bar, 709 S.E.2d 633 (2011)
In Re Howard Hammer, Opinion No. 27070, Filed November 28,2011
In Re Kenneth E. Johns, Jr., Opinion No. 27677, Filed November 16, 2016
In Re Abigail Scudder Duffy, Opinion No. 27679, Filed November 16, 2016
In Re Magistrate Gordon Blackwell Johnson, Sr., Opinion No. 27721, Filed May 31, 2017

South Carolina Bar
High School Professionalism and Civility Award
Standards of Professionalism

University of South Carolina School of Law
LAWS 560 – Foundations of Law Practice and Professionalism

Articles
David A Grenardo, Enforcing Civility: Holding Attorneys to a Higher Standard
G.M. Filisko, You’re Out of Order! Dealing with the Costs of Incivility in the Legal Profession, January 2013
Senior Judge Gerald W. Hardcastle, Civility in the Courtroom, A Judge’s Perspective, December 2009, Nevada Lawyer
Lawyer bullies, incivility: On policing lawyer manners, October 2015, Around the ABA
Ellen Moynihan, Manhattan Judges Caught Exchanging Expletives in Courtroom, New York Daily News, October 12, 2017
Lawyers and Depression, Dave Nee Foundation
Jeena Cho, Why Are Lawyers So Unhappy? August 1, 2016
Sean Federico-O’Murchu, Florida Judge John C. Murphy Fired For “Appalling Behavior”, NBC News, December 18, 2015

Miscellaneous
Casting Crowns, Broken Together
Eminem, Die Alone
Dave Mason, We Just Disagree
The Beatles, We Can Work it Out
Ozzy Osbourne, Crazy Train
Aretha Franklin, Respect

Warren Moise, Esquire: Little known and/or little understood evidence rules

Part I: Weird Witnesses
We're all familiar with calling our client, eyewitnesses, and experts to the stand. But every now and then, there are situations where a non-traditional witness has important information. Never having seen it done, we wonder whether we can call this person to trial. I call these “weird witnesses.”
The common law often excluded weird witnesses as incompetent. Now, virtually everyone is presumed "competent" to be a witness under Fed. & S.C. Rs. Evid. 601.
We’re all familiar with the general rules. The presiding judge cannot be a witness in the same case over which he or she presides. Rule 605. A juror is incompetent to testify, although in rare cases the juror might be allowed to testify about extraneous prejudicial information or outside influences on the jury itself. Rule 606. Then there are statutes such as the Dead Man's Statute and the parol evidence rule (actually both a statutory rule under the UCC and also a common-law rule) which make witnesses incompetent.
There aren't many exceptions to whether a witness is competent to testify. The more difficult question is whether certain weird witnesses, although technically competent, may or should be called.

Post-trial testimony by judges

Okay, judges aren't weird. However, they aren't your everyday witness. Rarely are judges absolutely barred from testifying in trials where they are not the presiding judicial officer. When a judge's expected testimony is about something that arose in a prior trial or case, no one wants to call him or her unless absolutely necessary. I suspect that the issue arises more often with the state judiciary than in federal courts, and in my experience, the judge typically sought to be a witness is a state magistrate. This is true for two reasons: (a) first, although record-keeping is much improved in modern times, sometimes the magistrate's record is incomplete; (b) second, magistrates sign arrest and search warrants which are occasionally the subject of attack in general sessions courts in motions to suppress.
So what's the rule? Judges aren't prohibited by Canon 2 of either the Code of Conduct for United States Judges or the South Carolina Code of Judicial Conduct from acting as involuntary (i.e., under subpoena) character witnesses; however, Canon 2 requires the judge to discourage someone from calling her, except when the demands of justice require it. Think about it - imagine how uncomfortable you as an adverse attorney would be if you had to impeach a judge's credibility?
Judges also are competent to testify in later trials about a prior case over which they were involved as the judicial officer. However, the modern trend is not to let them, "unless the testimony: (1) is critical, and (2) can be obtained by no other means." In re Whetstone, 354 S.C. 213, 580 S.E.2d 447 (2003). See also United States v. Dowdy, 440 F. Supp. 894 (W.D. Va. 1977) (examination of judges as to basis for their opinions disallowed "absent extreme and extraordinary circumstances"). "To show extraordinary circumstances, a presumption as to the regularity of the acts of public officials must first be overcome." Id. 440 F. Supp. at 896.
Canon 2 also warns against judges sua sponte communicating information to a sentencing judge or a probation or corrections officer. However, a judge may provide information to them if formally requested.

Executive officers in the government

Yes, even executive officers can be made to testify. President Monroe answered written interrogatories, President Nixon had to respond to subpoenas, and President Ford was deposed in a criminal prosecution. Mark Sanford has been sued in a declaratory judgment action in which it was claimed that he was ineligible to serve as governor.
The apogee of a federal executive officer's involvement with the judicial process is Bill Clinton. He testified in two video depositions for use in criminal proceedings. That was just his start. Paula Jones v. William Jefferson Clinton, 520 U.S. 681 (1997) shows that even the highest executive officer in the land may be sued for wrongdoing while in office. Similarly, in Paula Jones v. William Jefferson Clinton, 36 F. Supp. 2d 1118 (E.D. Ark. 1999), President Clinton was tried and found in contempt. Judge Wright found that his conduct (lying in depositions, interrogatories, an affidavit, and through his attorney - stuff like that) involved dishonesty, fraud, deceit or misrepresentation, or was prejudicial to the administration of justice. Oh yeah, then there was the impeachment before the House of Representatives.
Other officials in the executive branch may be deposed assuming they have knowledge of important facts. Atlanta Journal and Constitution v. Atlanta Dept. of Aviation, 175 F.R.D. 347 (N.D. Ga. 1997) (mayor of Atlanta). Nonetheless, the higher up the food chain, the less inclined a judge will be to allow discovery. For example, it's been held that an oral deposition of a
cabinet-level official usually won't be allowed. Peoples v. Dept. of Agriculture, 427 F.2d 561 (C.A.D.C. 1970). Moreover, as with judges, a member of the executive branch should not be deposed or examined about his official decision-making process when the decision was made in a quasi-judicial manner. United States v. Morgan, 313 U.S. 409 (1940) (Secretary of Agriculture).

Legislators

Though they are excused from court on certain days during the legislative session, legislators generally are competent and not privileged from testifying at trial. Occasionally one hears of a congressman or senator being called as a character witness, such as when Senator Daniel Inouye recently testified in Alaska Senator Ted Stevens' criminal trial. Once I had an opponent name a legislator as a character witness just days before trial. After thinking about it, I agreed to waive the late notice if my adversary promised to call the legislator.
More interesting is whether a legislator may testify at trial about the legislative intent behind a statute he wrote or with which he was involved. The federal courts do take notice of legislators' comments on the house floor during the legislative process.
It's much harder to determine what goes on in the South Carolina General Assembly, which has steadfastly rejected real accountability. The legislators usually do voice votes so usually no one knows for certain how they vote. Thus, it's with some logic that since the days of Justice John Rutledge, South Carolina courts refuse to allow members of the General Assembly to testify about the legislative intent of a law, even when the statute's wording is unclear. See Executors of Rippon v. Executors of Townsend, 1 S.C.L. (1 Bay) 445 (1795).

Bailiffs, sheriffs, and clerks of court

Cases go both ways on the propriety of calling either a bailiff or a deputy assigned as courtroom security to testify during trial. Obviously, because the bailiff is a law-enforcement officer of sorts employed by the sheriff, there is a danger of prejudicing the defendant. Some

courts find a bailiff working at a trial per-se incompetent to testify. Other courts allow a bailiff, or sheriff acting as bailiff, to testify depending upon the situation. The issue often turns upon how closely the bailiff is associated with jurors at trial. For example, a bailiff who merely called out the names of jurors while assisting the clerk during voir dire is less likely to influence them than the specific bailiff assigned to escort and guard the jury throughout trial. See generally 98
C.J.S. Witnesses § 197 (Supp. 2008).
More common (and less problematic) are scenarios where a clerk of court is called to testify about the authenticity of court records in her office. This practice is typically allowed. It's rare to find a case where a party was denied the right to call a clerk as a witness (or objects to a clerk being called).

Lawyers, the advocate-witness rule, and Rule 3.7

All witnesses are presumed competent under Evidence Rule 601. Although lawyers are competent to testify as witnesses under Rule 601, courts are very reluctant to allow them to do so when acting as advocates in the same trial. Many courts recognize the advocate-witness rule barring a lawyer as a witness in the same case where she appears as an advocate. Thus, for example, judges have discretion to prohibit counsel of record from testifying about facts in issue, testifying to impeach a witness, or calling another party's lawyer to the stand.
Attorney testimony began as a common-law evidentiary rule, and is now embodied in ethics rules. South Carolina Appellate Court Rule 407, § 3.7 (also adopted by the federal courts in this state) bars lawyers from acting as witnesses unless: (1) the testimony relates to uncontested issues; (2) the testimony relates to the legal services rendered in the case (e.g., attorney's fees); or (3) it would cause a "substantial hardship" to the client. See Estate of Andrews
v. United States, 804 F. Supp. 820, 829 (E.D. Va. 1992) ("substantial hardship" construed narrowly to exclude co-executor). However, unless there is a conflict of interest, Rule 407, § 3.7(b) allows another lawyer in the same firm to be a witness. The advocate-witness rule is less problematic in a bench trial.
In the Fourth Circuit, a lawyer may testify when the testimony is important and no other witness is able to supply it. See United States v. Fogel, 901 F.2d 23, 26 (4th Cir. 1990), and essentially the same rule applies in the state courts. See State v. Lee, 203 S.C. 536 (1943). Two policy reasons have been cited for excluding attorneys' testimony. (Get ready for some contradictory logic.) First, the public's confidence in and respect for the legal profession might be reduced by a possible perception that lawyers would distort the truth for their clients. (Awww!) Secondly, the public might attach undue importance to the lawyer's testimony. The latter policy is more likely to be a factor when the attorney is a government prosecutor, and it's rooted in the rule against prosecutors vouching for their witnesses.
A defendant may call a government lawyer only if required by a compelling and legitimate need. The South Carolina courts look with disfavor upon a prosecutor testifying as a witness for the state, unless unavoidable. However, a government attorney who didn't help prepare (or is not trying) the case but merely observed a witness's interview is not necessarily barred from testifying about a prior-inconsistent statement just because she's a prosecutor. Pre-
Crawford v. Washington, 541 U.S. 36 (2004) cases went both ways on whether the advocate-witness rule abridges the right to confrontation and a complete defense.
Post-conviction relief hearings are an exception to the advocate-witness rule. The rule doesn't bar the former attorney for a convicted criminal from testifying in a PCR hearing about

issues arising during the initial prosecution.
There's another scenario where the advocate-witness rule might rear its head. Assume a cross-examining attorney poses questions implying that the witness made a prior statement to that same attorney but different from the witness's trial testimony. Doesn't the questioning attorney essentially pit her credibility against that of the witness? This is especially true when the cross-examiner poses the prior statement as "fact," for example:
"And Mr. Defendant, when I said to you previously that the drugs were in your car, you admitted they belonged to you, didn't ya?"
Assume further that Mr. Defendant denies making the statement but the judge forbids Mr. Defendant from calling and cross-examining the questioning attorney. Here, an argument may be made that Mr. Defendant is denied the right to confrontation.
The reverse of the advocate witness rule bars the lawyer from representing a party if he is a necessary witness. In Collins Entertainment, Inc. v. White, 363 S.C. 546 (Ct. App. 2005), the South Carolina Court of Appeals held that the trial judge properly barred a witness from acting as an attorney and also a witness in the case. The analysis was done using South Carolina Appellate Court Rule 407, § 3.7. The witness fell within none of the three exceptions listed in § 3.7, and thus the judge correctly excluded his testimony.

Paralegals and legal staff members

I always thought a lawyer may call a member of his own staff as a witness. Certainly evidence Rule 601 wouldn't bar it. The key is whether the staff member is viewed as an extension of the attorney under the advocate-witness rule. Some courts prohibit testimony by members of the lawyer's staff, see Grizzle v. Travelers Health Network, Inc., 14 F.3d 261, 270 (5th Cir. 1994) ("Permitting testimony by an employee of an attorney who is assisting in the preparation and prosecution of the case is tantamount to permitting testimony by one's attorney."), but others allow it, see United States v. Ewing, 979 F.2d 1234 (7th Cir. 1992) (disallowing defendant's public defender's testimony but allowing paralegal's). See also Spearman Indus., Inc. v. St. Paul Fire and Marine Ins. Co., 128 F. Supp. 2d 1148 (N.D. Ill. 2001) (attorney's secretary allowed to authenticate lawyer's letters).

Insurance adjusters not involving bad-faith claims

Part investigator, part evaluator, claims professionals are competent witnesses under Rule 601. After all, adjusters often begin their investigations before the second shoe hits the ground.
Adjusters take recorded statements, photograph accident scenes and cars, interview witnesses, examine defective products, etc.
As with other weird witnesses, there are some problems here. The problems are illustrated through two questions: (a) Will insurance be injected into the trial?, and (b) Is the adjuster's testimony privileged or would it reveal proprietary information?
Of course, insurance doesn't have to be injected into the trial merely because the adjuster testifies. Unless it's contended that the adjuster is shading her testimony to help her insured, has taken a recorded statement in such a way to manipulate the witness's words, or some other reason why insurance simply must be introduced, the parties may stipulate, or the court may order, that the adjuster be referred to as an "investigator." I've seen this done in several trials, and it worked well.
The second issue - whether the adjuster's testimony or file information is privileged - is

not difficult to analyze, but courts are inconsistent on the issue. Most courts have little difficulty about whether an adjuster and her insured's attorney enjoy attorney-client privilege (generally, yes). The problems usually arise with those legacies of Hickman v. Taylor, 329 U.S. 495 (1947) - work product privilege and the protection provided by Rule 26(b)(3).
The work product privilege set forth in Hickman and Rule 26(b)(3) protects notes, mental impressions, strategies, case evaluations, etc. of an attorney, and by extension, those of his adjuster. Not really too difficult. However, adjusters usually get started on their investigations before the defense lawyer is retained. Civil procedure Rule 26(b)(3) bars "discover[y of] documents and tangible things . . . prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent)." Only when there is undue hardship and a showing of substantial need may the adjuster be required to fork over the documents and tangible things in her file. See National Union Fire Ins. Co. of Pittsburgh, Pa. v. Murray Sheet Metal, 967 F.2d 980 (4th Cir.
1992) (statements taken by "safety" director possibly not in anticipation of litigation but nonetheless substantial need often shown when plaintiff disabled from making his own investigation). Even then, the court "must protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of a party's attorney or other representative concerning the litigation."
The battle often revolves around whether the adjuster's work was done in "anticipation of litigation." In McDougall v. Dunn, 468 F.2d 468 (4th Cir. 1972), the Fourth Circuit noted the ever-present possibility of litigation in America. However, the court held that to be protected, the document "must be prepared because of the prospect of litigation when the preparer faces an actual claim or a potential claim following an actual event or series of events that reasonably could result in litigation." Id. 468 F.2d at 984.
When does that magical moment arrive when an adjuster - duh-duhhh - starts to anticipate litigation? According to the Fourth Circuit, it's when the adjuster believes she's faced with an actual claim or a potential claim following an actual event or series of events that reasonably could result in litigation. The Fourth Circuit didn't adopt the bright line test used by some judges, namely the point when a defense lawyer is retained.
Under this defense-lawyer-retention test, it's my experience that an adjuster typically is required to turn over most of the initial investigatory materials in her file. It's a liberal approach that fits well with longstanding evidence-law public policies disfavoring evidentiary privileges. After all, each year we have more evidentiary privileges created making litigation more expensive and making the truth more difficult to uncover.
Unfortunately, the defense-lawyer-retention test is not the test found in Rule 26(b)(3), which looks at the point when an adjuster begins to anticipate that this claim might "reasonably result in litigation." Does her anticipation crystalize when the adjuster learns that the claimant hired a lawyer? On the other hand, shouldn't she reasonably anticipate settlement (not litigation) when the claimant's lawyer tells her that the insured was DUI, the claimant is now a paraplegic, but the insured's coverage for this rearend accident is only $25,000? It just depends on the facts, which is why most district judges appear to decide "anticipation of litigation" on a case-by-case basis. See Suggs v. Whitaker, 152 F.R.D. 501, 506 (M.D.N.C. 1993).
Finally, testimony by adjusters or discovery of their files might reveal proprietary information and result in a motion for a protective order under Federal Rule of Civil Procedure 26(c)(1)(G) (order may "requir[e] that a trade secret or other confidential research, development,

or commercial information not be revealed or be revealed only in a specified way"). Cf. Sharbono v. Universal Underwriters Ins. Co., 139 Wash. App. 383 (Div. 2, 2007) (insurer's contentions that "[u]nderwriting files can often contain information reflecting an insurer's procedures used to evaluate risks, a vital internal business practice"and "[d]isclosure . . . would put the insurer at a commercial disadvantage" were plausible).

Insurance adjusters and files in bad-faith claims

Unlike most garden-variety cases where the adjuster is handling a claim, often together with an insurance defense lawyer, the rules change when the adjuster’s boss (i.e., the insurer) is being sued for bad faith claims adjusting. The adjuster’s pre-suit file becomes highly relevant as it documents the adjuster’s handling of the claim. (Under our law, even if an insured is not entitled to benefits under the policy, the insured is still entitled to reasonable, fair, and timely claims handling.)

Part II: Wreck This! Evidence in Auto-Accident Cases
Question: Why do they call him a "chicken lawyer?" Answer: Because all he handles are necks and backs.

Introduction
Snicker if you will, but there's money in them necks and backs. Personal-injury attorneys know that when large masses of metal with people inside collide at high speeds on the highway, serious injuries can result. Moreover, there is little doubt that within the, uh, flock of
auto-accident lawyers are found many of South Carolina's most experienced and effective litigators.
A substantial number, if not a majority, of jury trials in common-pleas courts involve auto accident negligence cases. Although the evidence rules are the same as in other litigation, ceratin scenarios repeatedly surface more often in wreck trials. For those members of the bar who don't try such cases, this column is for you.

Basic Liability Issues
Before a lay witness may testify about how an accident happened, he must have personal knowledge of it. Fed. & S.C. Rs, Evid. 602. In auto-accident trials, this means that a foundation must be laid showing that the witness saw the accident. However, unlike other witnesses, parties may admit matters about which they have absolutely no personal knowledge under rule 801. This guarantees that almost every wild guess, off-color joke, or other stupid thing your client volunteers about the case might come into evidence. For example, a lay witness probably cannot testify that he fell asleep, ran a red light, and woke up after the collision: because he was asleep, he would have no personal knowledge of the traffic light's color. A party, however, can make such an admission.
The vehicles' speeds often are a critical issue in auto cases because driving over a posted speed limit is negligence per se and evidence of recklessness. A witness who saw a vehicle before an accident may testify that it was stopped, but if it were moving, admissibility is a bit more complicated. A foundation must be laid showing that the witness has some basis for judging the speed, and even then the issue is discretionary. A judge will probably look at factors such as: (a) whether the witness has a driver's license and how long the witness had been driving;

the length of time the witness observed the vehicles; (c) whether the witness was driving the same direction in a nearby proximity such that the witness could contrast his speed with that of the parties' vehicles; and (d) similar factors.

Opinions about fault are problematic. A non-party lay witness may give an opinion, although not on a matter requiring special training or expertise. Thus, lay witnesses are almost never allowed to opine that one or the other party was at fault, negligent, or caused the accident. Judge Jack Weinstein, who was on the Federal Rules of Evidence Advisory Committee, believes that loaded terms (e.g., "stolen," "accident," and "assault") should be barred when they are the very issues being decided.
Experts are not barred from testifying about ultimate issues in the case under rule 704.
However, some courts will not allow an expert to use the legal terms at issue, such as "negligent," see United States v. Barile, 286 F.3d 749 (4th Cir. 2002) (legal conclusion not

helpful to jury); cf. Dawkins v. Fields, 354 S.C. 58, 580 S.E.2d 433 (2003) (Waller, J.) (expert opinions about legal issues inadmissible), although admission of terms such as driving "unsafely," "too fast," etc. is probably discretionary with the court.
The Seventh Circuit has shied away from even allowing an attorney-defendant from admitting that a "conspiracy" existed. United States v. Espino, 32 F.3d 253 (7th Cir. 1994); see also United States v. Baskes, 649 F.2d 471 (7th Cir. 1980) (attorney indicted as coconspirator could not be asked if coconspirators' conduct was "unlawful" or "wilful"). Possibly the better rule is that although a party might properly admit a legal conclusion through his attorney, such as in a pleading or through a stipulation, cross-examination of a lay party at trial about a legal term of art should be prohibited under rule 403 unless a foundation is laid showing that he has at least some basic understanding of the matter he is admitting. It's a tough call either way from a policy standpoint.

Use of Seat Belts
In the garden-variety wreck case, in which no allegation is made that the vehicle was uncrashworthy, evidence that a plaintiff neglected to use a seatbelt is inadmissible in state courts to show negligence, S.C. Code Ann. §§ 56-5-6460, -6540(C), and based upon the statutes' wording, possibly in federal courts also. Under the crashworthiness doctrine, evidence of failure to wear a seatbelt has been held relevant to whether the vehicle's overall safety design was reasonable, despite South Carolina's statute. See Jimenez v. DaimlerChrysler Corp., 269 F.3d 439 (4th Cir. 2001).

Police Officers and Experts
The investigating officer often is an important witness. However, unless she is an expert, such as an accident reconstructionist, a biomechanical expert, an engineer, or otherwise has expertise under Rule 702, her testimony is technically no different than any other lay witness.
She can testify about what was said to her by parties (although not by absent witnesses unless non-hearsay or within a hearsay exception such as an excited utterance), the position of the vehicles, and other conditions or events that she observed once she arrived. However, she generally may not testify about:

How the accident happened (unless she saw it)
Who was at fault
The vehicles' speeds or that a party was driving too fast for conditions, following too closely
Who was, or was not, obeying the law
That she believed one witness's story over another
The color of the traffic light when the parties entered the intersection

Be mindful that on occasion, courts have upheld expert testimony by traffic officers with no real training in accident reconstruction or engineering. See Gladhill v. General Motors Corp., 743 F.2d 1049, 1052 (4th Cir. 1984); State v. Goode, 305 S.C. 176, 406 S.E.2d 391 (Ct. App.
1991).

The Traffic Violation and "Traffic Court"
An investigating officer may not testify that he gave a traffic citation to a driver. When a citation is given to a driver under the Uniform Act Regulating Traffic Upon Highways (and most

citations will be) and the criminal case is tried, the judge or jury's verdict to convict is inadmissible in the civil action. S.C. Code Ann. § 56-5-6160 (convictions inadmissible). Statements of witnesses and parties' admissions (including guilty pleas other than nolo contendere) made in the criminal trial are admissible in the civil trial as prior statements or admissions; the fact that the party was being tried for a traffic violation should be kept from the civil jury, however. A party may not be impeached by the fact that he "paid the fine" without appearing in court.

Damages and Proximate Causation
Damages in auto accident cases are proved (and disproved) no differently than in other tort cases. Frequently, expert medical or chiropractic testimony is offered. Economists, biomechanical engineers, human-factors experts, vocational-rehabilitation specialists, paramedics, therapists, and others are common damages witnesses. Where there is evidence of permanent impairment, the mortality tables should be charged to the jury. See S.C. Code Ann. § 19-1-150.
Although the cases cited above show that courts are reluctant to let experts use legal terms of art, both the United States and South Carolina courts regularly permit a medical expert to testify that the "cause" of the plaintiff's injuries was the automobile accident in question.
Possibly a judge would balk at testimony that injuries were "proximately caused" by the accident, but such testimony rarely is offered.

A Few Odds and Ends
Before concluding, let me note a few more evidentiary issues that may arise. In cases where a driver or a witness is alleged to have been under the influence of drugs or alcohol, it is generally accepted that the driver's impairment may be proved by lay testimony. This is discretionary with the trial judge, of course. A lay party witness may testify about the extent of damage to his car and give a dollar figure.
A driver's past mobile indiscretions (typically called his "bad driving record") is inadmissible evidence of bad character in run-of-the-mill negligence cases. Arguments may be fashioned that similar driving violations of either party (good and bad) are admissible both to show state of mind when a driver's recklessness is alleged and as relevant to punitive damages. The state courts have not spoken on this issue, and I am unaware of a Fourth Circuit case on point. When the owner has negligently entrusted a vehicle to an incompetent driver, and the driver injures the plaintiff, the driver's past instances of bad driving (or the lack thereof) are admissible under rules 402 and 405 as character "in issue." Fed. R. Evid. 404(a) advisory committee note.
Finally, when inculpatory statements of a defendant business's driver are proffered as party admissions under rule 801, a foundation regarding course and scope of employment may be required.
In short, in MVA trials, the rules are the same, only different. Research, prepare well, and happy hunting -- and don't forget the chicken wings.

Part III: Sailing Between Scilla and Charybdis: Nolo-Contendere andAlford Pleas

Ever feel like it’s impossible to navigate a difficult plea through uncertain and dangerous seas? Welcome to nolo-contendere and Alford pleas. Called a “foolish concept” by Judge Learned Hand, nolo pleas (“I do not wish to contend”) have always been available in the federal courts. Nolo pleas, once known as pleas non vult contendere, might have originated in early medieval times from a procedure whereby a defendant hoping to avoid imprisonment tried to end the prosecution [finem facere] by offering to pay money to the king. 2 F. Pollock & F. Maitland, The History of English Law 517 (2d ed. 1909). English courts, however, tossed the plea into the procedural trash can over three centuries ago.
The idea for allowing nolo pleas under modern American law is to encourage more cases to plead so courts won’t be overwhelmed with trials. Statistics don’t bear this out. Out of 60,255 federal cases terminated in the fiscal year 1996, only 275 were ended by nolo pleas. Not real overwhelming.
In contrast, Alford pleas are newborn babies, arising from North Carolina v. Alford, 400
U.S. 25 (1970), an appeal 36 years ago out of the Fourth Circuit. In an Alford plea, the accused essentially says, “Hey, I’m not guilty but it’s a cinch that prosecutor’ll convict me anyways. So I’m going to plead.” Some courts call it a “best interest” plea. No mystery there.
Neither nolo nor Alford pleas involve an express admission of guilt, but rather amount to consent to be convicted and punished.

Like, no way!
The first hurdle to entering a nolo or Alford plea may be overcoming opposition by the prosecutor or the judge. Only in extraordinary circumstances, and with the Attorney General’s consent, will a US Attorney voluntarily agree to either plea. U.S. Atty’s. Man. 9-27.440.
However, the ultimate decision whether to accept a plea lies with the judge, not the prosecutor. The Fourth Circuit recognized in dicta that “excellent reasons exist for permitting an Alford plea,” see United States v. Morrow, 914 F.2d 608, 612 n.6 (4th Cir. 1990), but the trial judge’s discretion is broad. The Tenth Circuit approved a judge’s general policy of rejecting any nolo or Alford plea. In United States v. Gaskins, 485 F.2d 1046, 1048 (D.C. Cir. 1973), the court found that refusal to accept guilty pleas solely because accused does not admit the crime is an abuse of discretion. Contra State v. Paris, 354 S.C. 1, 578 S.E.2d 751 (Ct. App. 2003) (Hearn, C.J.).

Is there any real difference between nolo and Alford pleas?
The Supreme Court saw no practical difference between nolo and Alford pleas from a constitutional standpoint: “[W]e can[not] perceive any material difference between a plea that refuses to admit commission of the criminal act and a plea containing a protestation of innocence
. . . .” Alford, 40 U.S. at 37. See also Fed. R. Crim. P. 11 advisory committee note to 1974 amendments (suggests treating nolo and Alford pleas same in some scenarios).
But are nolo and Alford pleas synonymous under procedural rules? Alford was hot off the presses when the proposed Federal Rules of Evidence were debated in the early 1970s. The Federal and South Carolina Rules of Evidence mention nolo pleas twice, once in Rule 410 relating to inadmissibility of nolo pleas and also in Rule 803(22) making convictions based on nolo pleas

inapplicable to that hearsay exception. Alford pleas are mentioned nowhere in the federal rules but are specifically referred to in state Rule 609 (criminal convictions from nolo and Alford pleas admissible). Cf. Ken. R. Evid. 410(2) (both nolo and Alford pleas mentioned in rule).
Good arguments can be made both ways about whether Alford and nolo pleas should be treated the same under procedural rules. For example, (a) both pleas are the same because the Supreme Court essentially said so in Alford; (b) on the other hand, the Supreme Court only dealt with constitutional questions, not evidence issues; (c) if Alford pleas were supposed to be covered by Rules 410(2) or 803(22), the drafters would have included them; and (d) the state evidence rules specifically mention Alford pleas in Rule 609 but nowhere else, thus, Alford pleas are not covered by Rules 410(2) or 803(22). And so on.

The plea hearing
Up to a point, all plea hearings are done the same. However, particular care must be taken to ensure that a defendant understands the nature and effects of his plea when an Alford plea is made. Morrow, 914 F.2d at 612 n.6.
A court typically cannot accept a guilty plea unless there are facts in the record supporting guilt. In federal courts, there is no similar requirement for a nolo plea. Fed. R. Crim. P. 11; Note, Curtis J. Shipley, The Alford Plea: A Necessary but Unpredictable Tool for the Criminal Defendant, 72 Iowa L. Rev. 1063 (1987). If nolo and Alford pleas were treated identically by a federal judge, then no factual basis would be required for an Alford plea either. However, the Alford Court appeared to indicate that a factual basis was required for an Alford plea. See Alford, 400 U.S. at 38 n.10 (“[V]arious state and federal court decisions properly caution that pleas coupled with claims of innocence should not be accepted unless there is a factual basis for the plea.”). Cf. Rollison v. State, 346 S.C. 506, 511, 552 S.E.2d 290, 292 (2001) (Pleicones, J.) (non- Alford case in which Court observed: “All that is required before a plea can be accepted is that the defendant understand the nature and crucial elements of the charges, the consequences of the plea, and the constitutional rights he is waiving, and that the record reflect a factual basis for the plea.”).

Nolo and Alford pleas as evidence
Often the reason for entering an Alford or nolo plea is its effect in subsequent litigation. The first question is whether the spoken words of the plea are admissible in later litigation as an admission. At least as to nolo pleas, the answer usually is no. Fed. & S.C. Rs. Evid. 410(2).
Assuming the spoken words are inadmissible, the next question becomes whether a conviction arising from a nolo plea is admissible. As drafted by the Advisory Committee, evidence Rule 609 allowed the district court to introduce “evidence that [a witness] has been convicted of a crime, except on a plea of nolo contendere.” However, the reference to nolo contendere was deleted, presumably with Congress’s knowledge and approval. Thus, in the United States courts, a conviction arising from a nolo plea in unrelated litigation may be shown under Rule 609. The same applies in the state courts. S.C. R. Evid. 609 (nolo and Alford convictions admissible). Cf. Mendoza v. Gates, 19 Fed. Appx. 514 (9th Cir. 2001) (unpublished opinion) (conviction based on nolo plea admissible under rule 404(b)).
Is a plea or conviction arising from a nolo or Alford plea admissible in subsequent civil litigation arising from the same facts? Judge Jack Weinstein, a member of the original Advisory Committee for the Federal Rules of Evidence, wrote that “[in] any subsequent action, whether

arising out of the same facts or not, neither the nolo plea nor the conviction based on the plea may be admitted as either an admission or proof of guilt,” 2 Jack B. Weinstein, Weinstein's Federal Evidence § 410.[06], at 410-37, 410-38 (1982) (citing Rule 803(22)). Then Judge Weinstein went on to say that convictions based on nolo pleas are admissible under Rule 609, see id.
Whether an Alford plea may be used as a party admission probably involves a decision about public policy. If the court focuses on similarities between Alford and nolo pleas, it may decide to bar admissibility of an Alford plea (as it does with nolos). However, if it sees the defendant as trying to use Alford to escape collateral consequences of his plea, it may come down in favor of allowing an Alford plea for impeachment. Compare N.Y. Underwriters Ins. Co. v.
Doty, 794 P.2d 521 (Wn. App. 1990) (Alford plea constitutes a "statement" and thus a party admission) with United States v. Elizondo, 277 F. Supp. 2d 691 (S.D. Tex. 2002) (Alford plea similar to nolo plea and thus excluded under rule 403).

Collateral estoppel
Then there’s collateral estoppel. In Doe v. Doe, 346 S.C. 145, 148, 551 S.E.2d 257, 258 (2001), the South Carolina Supreme Court held that a party convicted of a crime is bound (in most cases) by the adjudication in subsequent litigation arising out of the same facts. Nolo pleas usually do not give rise to collateral estoppel against a defendant, but will bar him from suing his lawyer for malpractice in a civil action arising out of the same charges, or from charges arising out of the same conduct.
Will Alford pleas give rise to collateral estoppel in litigation arising from the same facts?
The question is unanswered in South Carolina. An argument may be made on policy grounds embodied in Rules 410(2) and 803(22) against using convictions arising from Alford pleas to cause collateral-estoppel. However, courts do tend to distinguish between an Alford plea (which requires a factual basis for guilt to be proved during the plea hearing) and a nolo plea (no factual basis required), allowing preclusive effect to Alford pleas only. See Cortese v. Black, 838 F. Supp. 485, 492 (D. Colo. 1993). But see Falkner v. Foshaug, 108 Wash. App. 113, 29 P.3d 771 (2001). Other courts recognize exceptions permitting these type convictions in related “administrative” hearings or to show facts other than guilt. The analyses under the Restatement (Second) of Judgments § 85(2)(a) & § 29 (1982) could support an argument either way.

Putting the cart before the horse
Remember, just because the judge accepts a nolo or Alford plea doesn’t mean it will be favorably received during sentencing. Both amount to a conviction, after all. As Martha Stewart might say, most judges see genuine remorse on the defendant’s part as a “good thing.” Now picture a judge faced with a crying victim and clear proof of guilt on one side, and an Alford defendant brazenly denying culpability on the other side. Not a good thing. Cf. Mitchell v. United States, 526 U.S. 314 (1999) (expressing no opinion whether silence bears upon lack of remorse or acceptance of responsibility regarding downward departure under Sentencing Guidelines).
As we’ve seen, the law in this area, and its effects on subsequent litigation and sentencing, are not crystal clear. When counseling a nolo or Alford plea, be sure you document some of these uncertainties to your client in a letter. And make sure the client receives the letter before the plea hearing. You’ll rest easier at night if a PCR is filed.

Part IV: Common Civil Litigation Errors - Don’t Let Them Happen to You!
Trial advocacy no longer is a required course at the USC School of Law, my alma mater. It should be. Sometimes grave errors already have been made before the case ever makes its way into the courtroom. This column looks at some potential traps.

Poorly drafted affidavits
It is not uncommon to see parties file inadequate affidavits in support of summary judgment motions, although evidentiary objections rarely are raised during the hearings. Affidavits must comply with the evidence rules and set forth such facts that are admissible in evidence. Cf. Dawkins v. Fields, 354 S.C. 58, 580 S.E.2d 433 (2003) (Waller, J.).
First, the affiant must have personal knowledge of the matter. Fed. & S.C. Rs. Evid. 602.
Rambling affidavits filed by the lawyers reciting facts known from file reviews or with legal arguments may fail this test miserably. When an affiant has personal knowledge of the facts, “except those matters and things therein alleged upon information and belief, and as to those, he believes them to be true,” these also are inadequate under Rule 602 and SC R. Civ. P. 56(e).
Second, the facts must be admissible in evidence. An unsworn letter or a copy of a webpage, for example, is hearsay unless a proper foundation is set forth in the affidavit. See, e.g., Rohrbough v. Wyeth Labs., Inc., 916 F.2d 970 (4th Cir. 1990).
Finally, the affidavit must show affirmatively that the affiant is competent to testify about the matters in the affidavit. If an expert opinion is required to defeat summary judgment, the affidavit must set forth enough background from which the judge can find the expert to be qualified in her particular field. “I have expertise in the field of biomechanics” is merely a conclusion. A verified complaint may substitute for an affidavit, although it rarely will as a practical matter.

Discovery responses drafted by paralegals and associates
Interrogatory responses can provide devastating impeachment. Frequently the other attorney already knows the answers and sends the interrogatories as a set-up. Some lawyers completely delegate discovery responses to paralegals and associates. Doing so, without checking the answers closely, is a grave error. Basic non-controversial questions (the party’s address, past places of employment, and similar matters) rarely are problematic. However, clients don’t like to answer embarrassing questions, including questions about prior criminal convictions or other litigation in which they were involved. Answers about the factual description of the dispute itself may be exaggerated or plain wrong. Paralegals and associates sometimes just accept the client’s answers. The lawyer who will actually try the case must be more skeptical. If there is any doubt, discovery answers must be double-checked. For example, in response to a question regarding a prior criminal record, a SLED check should be done on one’s client if there is any question about his veracity.

Opening the door into otherwise inadmissible evidence
The opened-door doctrine is relentless and far-reaching. Don’t let it get you into trouble!
See generally G. Ross Anderson, Jr., Opening the Door, in The Bulletin 7 (Fall 1997). Its ugly

head pops up when you least expect it. For example, take those all-too frequent criminal trials where the accused has a lengthy rap sheet. Often the accused will stay off the witness stand to avoid impeachment. However, his defense lawyer might stumble into injecting the accused’s credibility right back in the trial. How could this happen? Assume, for example, that the defendant’s lawyer cross-examines an FBI agent like this: “But isn’t it true that my client denied any involvement when you asked him whose drugs they were?” Ouch! The opened-door doctrine is relentless and far-reaching. Don’t let it get you into trouble.

Sending otherwise inadmissible information to experts
Expert opinions may be based on hearsay and inadmissible information. By sending this type information to your own expert, you just might be giving a gift to your adversary that otherwise she would be unable to enjoy. Under Rule 705, an adverse party may require your expert to disclose such information at trial. Thus, when an expert reviews but decides not to give credence to or rely upon inadmissible information, an adversary may be able to get the information before a jury. See United States v. A & S Council Oil Co, 947 F.2d 1128 (4th Cir.
1991) (polygraph test results). Be careful what you send to your expert. It might come back to haunt you.

Health insurance
During deliberations in personal injury trials, certain questions come back with uncanny, almost predictable, regularity. Jurors often ask if the plaintiff had health insurance to cover his medical bills. They do not understand or accept the collateral-source rule, which is now a talking point in the tort reform movement.
Realizing that health insurance is inadmissible, defense lawyers rarely try to bring it up. Instead, the issue is indirectly raised by plaintiffs to justify why they did not seek medical care immediately after an injury or during a gap in treatment; the plaintiff testifies that he “could not afford” the treatment. This prejudices the defendant who is barred from showing that the plaintiff actually had insurance to cover the bills. Courts have solved this inequity by giving the judge discretion to permit defendants to introduce the plaintiff’s health insurance. Bonaparte v. Floyd, 291 S.C. 421, 554 S.E.2d 40 (1987). And remember, don’t cite Rule 411 when trying to bar evidence of health insurance - Rule 411 only addresses liability insurance.

Vague objections and motions for a directed verdict
Appellate courts don’t like lawyers to sandbag trial judges with vague objections. The objection must be specific, and the judge must actually rule on it. If the evidence is introduced then ruled inadmissible, in the state courts you must also move to strike. Objecting to the “form of the question” is not a proper trial objection, and some courts hold that it is inadequate for purposes of a deposition.
Similarly, a motion for a directed verdict should be specific. If you want the judge to strike the lost wages claim because the plaintiff never gave an hourly wage rate or testified about the number of hours absent from work, tell her and explain why! Don’t simply say that you’re asking for a directed verdict “upon the ground that the Plaintiff has failed to prove damages.”

Garrulous pleadings
On his CD Songs for a Dying Planet, Joe Walsh has a tune entitled “Shut Up.” The song

is about people who talk incessantly, and the chorus has a refrain, “[They] can't shut up,” [They] can’t shut up.” And so it is with complaints and answers. Lawyers just won’t shut up. Imagine what might happen if your lay client is asked to explain these sophistic pleadings during cross- examination. The physical pleadings aren’t admissible, see Century "21" Shows v. Owens, 400 F.2d 603 (8th Cir. 1968); S.C. R. Civ. P. 43(g), but they’re potential fodder for cross- examination. Lengthy complaints with detail after detail might become fruitful sources of impeachment if it turns out that some of the allegations are untrue or gross exaggerations. See generally G. Ross Anderson, Jr. & James A. Patrick, III, Attorney Admissions, in 7 S.C. Lawyer 20 (Nov./Dec. 1995). Inconsistencies between an amended complaint and a prior complaint in the same case may be admissible.
Sometimes lengthy pleadings are strategically useful. However, skillful plaintiffs’ lawyers usually draft very short, spare complaints with few details. Defense attorneys too can be garrulous, listing defense after defense. Some defenses are evidentiary defenses that need not be pleaded at all, such as the “sole negligence of a third party.” O'Neal v. Carolina Farm Supply of Johnston, 279 S.C. 490, 309 S.E.2d 776 (Ct. App. 1983).

Don’t let it happen to you!
The SC Bar is an excellent source of CLEs, publications, and on-line or mail-order legal seminars to give valuable trial tips. Moreover, there are valuable litigation-related publications such as the ABA’s Trial Evidence Journal, the SCTLA’s Bulletin, and the SCDTAA’s Defense Line to give helpful tips. Possibly the best advice is to discuss your case before trial with an experienced litigator for some strategic suggestions. Good luck, and happy hunting

Desa Ballard, Esquire: Ethics Complaints

uspension
Admittedly suffering from depression “associated with the dissolution of his marriage” Lawyer was arrested for DUI 1st, failure to give or giving improper signal; and hit and run with property damage. Ten months later lawyer was arrested and charged with use of a firearm while under the influence of alcohol or drugs; disorderly conduct; and damaging or tampering with a vehicle. After the filing of formal charges, lawyer, agreed that he committed criminal acts that reflect adversely on his honesty, trustworthiness, or fitness as a lawyer;
Mitigating facts included the following:

Respondent sought help from a licensed physician who monitored respondent tri- monthly, and who submitted a letter to respondent's attorney stating respondent is mentally and physically sound to practice law;
Respondent signed a two-year monitoring agreement with Lawyers Helping Lawyers requiring he remain alcohol-free and actively participate in Alcoholics Anonymous by attending at least two meetings per week; by all accounts respondent has complied with the agreement;
Respondent completed an evaluation at Carolina Psychiatric Services involving a Structured Diagnostic Interview and a psychiatric evaluation; the doctors completing both evaluations offered their professional opinion that respondent can return to the practice of law if he remains in treatment and maintains sobriety; and
Respondent has no prior disciplinary issues prior to the aforementioned incidents and submits he "deeply regrets" his conduct and is ashamed of it.

(In the Matter of Frank Barnwell McMaster - Opinion No. 27697 - January 11, 2017)
ven out of state lawyers must f                                        Public Reprimand
Out of State Lawyer brought an infringement action on behalf of Plaintiff’s alleging the defendant was selling a product in violation of the plaintiffs' rights. The lawsuit was originally filed in federal court in Georgia but was removed to South Carolina. While preparing for the litigation, Lawyer’s private investigators travelled to locations in South Carolina to pose as customers to obtain evidence to prove that the defendant was violating the intellectual property rights of the plaintiffs. During the investigation, Lawyer’s investigators made false statements to the defendant's employees and used tactics designed to prod the employees into making statements about the product. Respondent's investigators tape-recorded these conversations

without notice to the employees. Respondent was unaware that secret tape-recording, pretexting, and dissembling were in violation of the South Carolina Rules of Professional Conduct.

(In the Matter of Cecil Duff Nolan, Jr.- Opinion No. 27704 - February 1 disbarred

Lawyer pled guilty to two counts of securities fraud and one count of conspiracy. Lawyer was sentenced to ten years in prison, suspended to six years with the last two years of the sentence to be served on house arrest, followed by five years of probation.

In 2002, Lawyer and an acquaintance formed a company, for the purpose of re-lending money from a company owned by the acquaintance. Lawyer and his acquaintance were co- managers of the new company and Lawyer had a5 0 % ownership interest. In addition, respondent served as legal counsel. Respondent's legal fees were therefore tied to the value and profitability of the company, making his fee contingent on the success of the company’s operations.

For several years, respondent a scheme involving misrepresentations to investors, business partners, and South Carolina state agencies. The details of that scheme are set forth in a 2012 South Carolina State Grand Jury indictment charging respondent with conspiracy securities fraud, and forgery.

(In the Matter of Fredrick Scott Pfeiffer - Opinion No. 27703 - February 15, 2017)

6-month Definite Suspension

Lawyer represented Complainant in PCR. Judge denied PCR but found Complainant was entitled to a belated review of his direct appeal to which the State consented. Respondent did not serve and file a Notice of Appeal as required by Rule 243, SCACR and Rule 71.1(g) SCRCP.

Complainant filed the Notice of Appeal Pro Se and the Court sent a letter to the Respondent reminding him that he remained counsel of record and requested that Respondent notify the Court of when he had received written notice of entry of the final order and directed that the information be submitted within 10 days. Respondent failed to respond.

Court dismissed Complainant’s notice of appeal due to Respondent’s failure to establish timeliness of service. Respondent took no further action on Complainant’s case.

Respondent admits he failed to communicate with Complainant about the appeal, claiming that he believed his responsibilities ended with the denial of PCR and that an appellate defender would assume representation of Complainant. Respondent acknowledges that his failure to understand the applicable rules is not a defense to misconduct

(In the Matter of William Jeffrey McGurk - Opinion No. 27717 - May 11, 2017)

Money laundering, witness tampering = loss of license                                          Disbarred
On February 6, 2017, respondent was convicted in the United States District Court for the District of Maryland of seven counts of money laundering, two counts of attempted tampering with official proceedings, and one count of attempted witness tampering.
(In the Matter of James Michael Farrell – Opinion N. 27733 – August 23,2017) Definite Suspension
Matter 1: Failed to ensure a Summons and Complaint were filed twice (!) in the same matter thereby missing the SOL. Subsequently created and had client sign a release which was then mailed to the insurance adjuster who Respondent hadn’t; spoken to in three years. Mail was returned undeliverable. Respondent took no further action and did not communicate with client A again.
Matter 2: While working for his former law firm Respondent accepted a case for which he caused advanced costs to be incurred While at the firm he filed an adoption petition and subsequently a voluntary relinquishment of parental rights to be signed. After Respondent left the law firm Client paid $1,550 for his work. Respondent did not turn this money over to his former law firm, nor did he place it in trust. Clients matter was dismissed by the Court after Respondent failed to request a hearing as instructed by the Court.
Matter 3; Deposited $5,000 retainer meant for law firm into his personal account. (In the Matter of Robert Clenten Campbell – Opinion No. 27735 – August 30, 2017)
Its Mine and I’m not Sharing!                                                                                 Disbarred(Note, Petition for Rehearing is pending)
Respondent initially was under investigation was about to sign an agreement for a public reprimand for failure to keep adequate records concerning his trust account (15 issues) when more serious charges were received that indicated that on seven different occasions Respondent entered into fee sharing arrangements with another attorney, failed to disclose the arrangement to the client and then failed to pay the other attorney, instead depositing the entire fee into his own law firm’s account.
(In the Matter of William Ashley Jordan – Opinion No. 27734 – August 30, 2017)
Crime only pays if you are a defense lawyer!                                                         DisbarredRespondent participated in a fraudulent investment scheme. He pled guilty to one count of wire fraud conspiracy. Respondent failed to file any response to formal charges and failed to appear at the proceedings before the Supreme Court despite having been ordered to do so.
Respondent partnered with two others to create an entity known as Global Holdings Group, LLC (GHG). McAdams and his co-defendants purported to engage in international financial investments and solicited funds from wealthy individuals for high-yield, unregulated transnational investment opportunities. Respondent used his status and position of confidence as an attorney

to identify and target wealthy individuals for solicitation of investment opportunities, while also bolstering the credibility of GHG. During the course of the enterprise, Respondent became aware that the investments were fraudulent and that the solicited funds were not being used as promised, but he continued to use his position as an attorney to solicit funds for GHG. Rather than engaging in any investment transactions, Respondent and his co-defendants used the solicited funds to pay for personal expenses and to make lulling payments to previous investors in an effort to perpetuate the fraud.

As conditions of the plea deal, Respondent agreed, inter alia, to further cooperate with the Federal Government    in    the    prosecution    of    his    co-defendants,   and   to    pay restitution totaling
$3,327,494.11.(In the Matter of Michael Mark McAdams – Opinion No. 27737 – September 14,2017)                                                9-month Definite Suspension
Respondent, a 56 year old male, was arrested and charged with voyeurism after he used a cell phone to take a picture up a woman’s skirt at a grocery store. H failed to inform the Commission on Lawyer Conduct in writing within 15 days of the arrest pursuant to Rule 8.3(a).
(In the Matter of Jacob Leon Parrott, - Opinion No 27736, - September 14, 2017)
When it is to good to be true                      ed
The numerous charges against Respondent include the unauthorized practice of law, improper fee arrangements, false statements before the court, and attempting to intimidate a former client through meritless lawsuits. Further, Respondent failed to answer the formal charges against her and failed to appear at her hearing before the Commission on Lawyer Conduct At the hearing before the Court Respondent offered no mitigating evidence or explanation for her conduct.

Respondent is an out of state lawyer currently residing in South Carolina. Upon her arrival in South Carolina, Respondent met an individual who owned two side by side properties one the individual lived in, the other was usually leased but currently vacant. Both properties were about to be foreclosed on. Respondent pressured the individual to allow her to represent her in the foreclosure matter and allow her to live in the vacant property rent free as payment for her services. Respondent subsequently obtained a possessory interest in the property via a Quit Claim deed to a corporation owned by respondent which was not filed until the foreclosure action was dismissed. Respondent did not work in the foreclosure matter while living rent free in the subject property and eventually a licensed South Carolina attorney was forced to make an appearance on behalf of the owner. ….and it gets worse from here

(In the Matter of Heather Mary Boone McKeever – Opinion No, 27739 – September 30, 2017)                                                                                      Public Reprimand
Respondent agreed to act as Guardian and Conservator for a patient at the Hospital where she worked as General Counsel. She subsequently hired her son to do repairs at the patient’s home. Respondent gave her son permission to stay in the home while he was working on the job.
However, Respondents son moved into the patient’s home. Son subsequently vandalized the home, forged the patient’s name to the patient’s car title and sold the car and sold some of the

patient’s possessions. Respondent promptly reported the matter o the police and was arrested and charged with failing to report exploitation o a vulnerable adult.
(In the Matter of Lisabeth Kirk Rogers – Opinion No. 27740 – October 4, 2017)
I don’t want to, you can’t make me!           on
On multiple occasions involving multiple court reporting agencies, respondent failed to pay for court reporting services after repeated attempts to collect. Only after complaints were filed with ODC, and notice of the complaint was sent to Respondent, did respondent pay the bill. This occurred so often that Respondent had already received a confidential admonition and a letter of caution for the same issues.
During this time, Respondent was 35 days late responding to his first Notice of Investigation and then failed to appear for his scheduled Rule 19 examination. He timely responded to two more Notices of Investigations and did appear for his rescheduled Rule 19 examination. After which respondent began to lapse and answered his next NOI 65 days late and only after missing a noticed appearance and a notification that ODC intended to petition for interim suspension.
When the next complaint came in; Respondent did not respond to the notice of investigation nor did appear after a subpoena issued by ODC.
Respondent entered into an accepted Agreement for Discipline by Consent which included certain conditions. The Commission sent 6 letters to the Respondent reminding of his obligations. Respondent has not kept up his side of the agreement.
(In the Matter of Darryl D. Smalls – Opinion No. 27741 – October 4, 2017)
When er                                                                                            Debarred
Out of state attorney applies for pro hac vice admission to the SC Supreme Court Office of Bar Admissions to represent wife in an action to modify certain language regarding Ex-Husband’s retirement funds. However, he fails to file his application or a motion to appear pro hac vice with the family court prior to making an appearance as required by the THEN Rule 404(c).
Approximately a year and a half AFTER the conclusion of the above matter, Respondent issued a subpoena to Ex-Husband’s former employer, under the caption of the prior, dismissed action. He then served “Plaintiff’s Request for Answers to Interrogatories, Admissions and Request for production of Documents” on Ex-Husband and his counsel, again citing the prior action.
Upon filing of formal charges by ODC, Respondent did not file any answer and was held in default.
(In the Matter of Alvin r. Lundgren – Opinion No 27742 – October 18, 20170
SCAM Alert!                                                                         9-months Definite suspensionRespondent was hired to negotiate the purchase of an oil rig in Oklahoma by NTB Management Planning and Control, LTD (NTB), an Israeli company. The fee agreement between Respondent and NTB provided for a retainer of $21,000 plus hourly fees; however, Respondent never received the retainer. Instead, NTB advised Respondent that insurance proceeds due to NTB would be wired to his account to be disbursed for expenses related to the purchase of the oil rig

as instructed. A wire of $48,600 from Liberty Company Insurance Brokers (Liberty) soon arrived in Respondent's trust account at Wells Fargo Bank (WF Trust Account), which prior to the wire had a balance of $2.43. NTB's USA director, Roland Nelson, asked Respondent to give him cash from these funds to pay NTB's expenses. Pursuant to Nelson's instructions, Respondent paid two of NTB's third party vendors. He withdrew cash in the amount of $6,600 to purchase a cashier's check made payable to the first vendor. He deposited the cashier's check into an account which Nelson identified as the vendor's account. On the same day, Respondent withdrew $8,000 in cash from his WF trust account. After Respondent gave Nelson $500 of this amount for his hotel bill, Respondent deposited the remaining $7,500 into his trust account at Bank of America (BOA Trust Account) and then transferred the funds to the second vendor's account. Respondent then paid himself a total of $8,500 in fees by way of two online transfers from his WF Trust Account, one to his operating account and another to his personal joint checking account. During an angry telephone call, Nelson claimed one or both of NTB's third-party vendors had not been paid and threatened to cut Respondent's throat. Desiring to terminate his relationship with NTB, Respondent decided to withdraw the balance from his WF Trust Account. Respondent forgot to account for the transfers he made for his fees equal to $8,500, so he believed the balance in the WF trust account was higher than it actually was. He signed a cash withdrawal slip for
$33,987.43 to purchase a cashier's check made payable to his firm and deposited the check into his BOA Trust Account. Once these transactions were processed, Respondent's WF Trust Account was overdrawn by $8,485. Although NTB is a legitimate company, the purchase of the oil rig was a fraudulent transaction. The wire from Liberty into Respondent's WF Trust Account was initiated by an email scam perpetrated on NTB. When Wells Fargo contacted Respondent about the overdraft and the fraudulent wire, Respondent agreed to return $33,987.43 to his WF Trust Account and authorized the return of the account balance equal to $25,467.43 to Liberty. He elected to retain the $8,500 in fees he paid to himself, claiming he failed to understand from his conversation with Wells Fargo that the funds belonged to Liberty
(In the Matter of James L. Bell, Respondent – Opinion No. 27755 – December 20, 2017) The trust account rules are there to protect you                                                                     Disbarred Respondent

NSF against trust account for which filing fees should have been keptsafe
Did not maintain receipt and disbursement journals
Did not maintain clientledgers
Did not reconcile his account (should be reconciledmonthly)
Did not retain his monthly bankstatements
Made 16 cash withdrawals from his trustaccount
Made cash deposits without noting the name of the clients on the depositslips
Issued checks to himself and third parties without identifying the client whosefunds were beingdisbursed
Issued checks for filing fees for clients from trust for whom no deposits hadbeen made.
Embezzled funds to pay personalbills

(In the Matter of Michael Frank Johnson – Opinion No. 27756 – Dece

Kathleen Barnes, Esquire: Appellate Practice

KATHLEEN C. BARNES

Appellate Case Law Update and Appellate Strategy
Law Update *(other cases to be added as opinions are released up until the CLE)*

Procedure

Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) – personal jurisdiction, stream of commerce test still the law
Myers v. TitleMax of S.C., Inc., Unpublished Op. No. 2017-UP-098 (Ct.
App. filed March 8, 2017) – affirmed order denying motion to compel arbitration on additional sustaining ground that appellant waived the right to enforce an arbitration clause
Waiver conduct that occurred after appellant filed the motion to compel included depositions of plaintiff, appellant’s employee, and another witness; and participating in mediation
Huck v. Oakland Wings, LLC, Op. No. 5500 (Ct. App. filed July 19, 2017)

– Rule 8, SCADR, review of settlement agreement

Patton v. Miller, Op. No. 27730 (Sup. Ct. filed July 26, 2017)

Real party in interest, Rule 17, SCRCP, and Rule 56, SCRCP

Proper plaintiff to seek child’s medical expenses

Collateral source rule

Rule 15, SCRCP, motion to amend a complaint

Law

Torts

Wickersham v. Ford Motor Co., 194 F. Supp. 434 (D.S.C. 2016) – recovery for suicide, product liability proof of design defect and punitive damages

2. Machin v. Carus Corp., 419 S.C. 527, 799 S.E.2d 468 (2017) – when plaintiff is injured on the job but sues someone other than his employer, (1) jury may know why employer is not a party, (2) defendant may argue the empty chair defense as to the employer but the jury may know about a workers’ compensation decision, (3) the jury may not apportion fault to the non-party employer.

Smith v. Tiffany, 799 S.E.2d 479 (2017) – Empty chair defense

Donze v. GM, LLC, 800 S.E.2d 479 (2017) – Comparative negligence does not apply in a crashworthiness product liability case
Tillman v. Tillman, 801 S.E.2d 757 (Ct. App. 2017) – appealability

Order granting Rule 12(b)(6) motion but simultaneously granting leave to amend pleadings is not immediately appealable

Clemmons v. Lowe’s Home Centers, Inc., Op. No. 27708 (Sup. Ct. filed March 8, 2017) – effect of gainful employment

UFP Eastern Division, Inc. v. Selective Ins. Co., 2017 U.S. Dist.

Lexis 17082, C/A/ No. 4:15-2801-RMG (D.S.C. Feb. 6, 2017) – Bad

faith action by additional insured

When is your case stayed?

Rules 205 and 241, SCACR

ii. Tillman v. Oakes, 398 S.C. 245, 728 S.E.2d 45 (Ct. App. 2012).

What part of the case is stayed?

In what Court can you litigate a stay?

Procedure for enforcing or lifting a stay

Rule 241, SCACR
Procedure

When is the Notice of Appeal due?

Electronic notice counts as written notice, Wells Fargo Bank, N.A. v. Fallon Props. S.C., LLC, 413 S.C. 642, 776 S.E.2d 575 (Ct. App. 2015)
Drafting the Notice of Appeal

How to appeal an oral ruling in a transcript

Cases consolidated in the trial court

Drafting the notice with an appellate stay in mind

How to deal with a sealed record on appeal

Rule 41.1, SCRCP, and Rule 240, SCACR, motion to seal and ask for stay of all deadlines
Ex parte Capital U-Drive It, Inc., 369 S.C. 1, 630 S.E.2d 464 (2006)

Example of order granting motion to seal

At the trial level

When and whether to file a Rule 59(e), SCRCP motion

Documents presented to the lower court, Rules 209 and 210 SCACR

Always file rather than rely on transcript reference

At the appellate level

Appellant

Framing the case

Choosing and writing the issues on appeal

Creating the Record on Appeal

Examples of orders from the Court of Appeals
Redaction/confidential identifier rule
How to effectively use the Reply Brief as the last word
Respondent
Motions
Dismiss the appeal
Strike designation of matter
Redirect tone of the case
Appealability
Issue preservation

Argument abandoned

Two issue rule/Law of the case

Additional sustaining grounds, Rule 220(c), SCACR

Brief Writing Strategy/Tips

Distinguish case facts
List at least two reasons the Court should agree with youCiting to the Record on Appeal

While you are waiting for oral argument
How long will you wait?
Stay updated on applicable law
Supplement brief citations under Rule 208(b)(7), SCACR
Appeal

Do you need a bond?
If so, how to get one?
S.C. Code Ann. § 18-9-130, et al.
Effect of not getting a bond
Appeal

Effect of settlement discussions on appeal
Procedure for dismissing an appeal
Rule 260, SCACR
Whether settlement requires circuit court approval, i.e., wrongful death
Appeal is Over

Effect of Remittitur
Costs on Appeal
What can you recover?
Procedure to request costs
In the Court of Appeals, Rule 222,SCACR
In the Supreme Court, Rule 242(j),SCACR

Stephen Spitz, Esquire

2017: Equity Update1 Stephen A Spitz2
Of Counsel
Stevens & Lee3
151 Meeting Street
Suite 350
Charleston, S.C. 29401
Office Phone: 843-414-5085 Email: sasp@stevenslee.com (Final)

We will not have time to go through all of the cases in this outline. I plan to pick several of the most interesting equity cases and chat only about those cases. Still, there is value in merely listing many of the cases in 2017 that raise equitable issues (and remember, the year is not at all over yet) because as you look over the list, you get some idea just how many cases, in one way or another, address equitable concepts, or equitable defenses, or equitable maxims, or equitable causes of action.

I was a law school professor that taught equity and property and real estate transactions at the University of South Carolina School of Law for 25 years and then taught equity (along with other courses) at the Charleston School of Law for IO years.
I claim to hold a license down in Beaufort County for an iterant fortune telling license. See S.C. Code Section 41-40-310. (Fortunately, the whole world is very happy to know that I have never used this license even once) And, to perhaps top even that, I further claim to hold a license to be an Admiral, in the Great Navy of the State of Nebraska, signed by the then Governor James Exon. (Of course, Nebraska is a totally landlocked state)

Stevens & Lee has approximately 150 lawyers and law offices in 12 different cities, listed below. It also has several subsidiaries.
Allentown, Pa.                         Princeton, NJ
Charleston, SC                         Reading, Pa. Harrisburg, Pa (2 offices)                             Scranton, Pa. Lancaster, Pa                                            Valley Forge, Pa.
New York City, NY                  Wilkes Barre, Pa.
Philadelphia, Pa.                       Wilmington, DE

United States Supreme Court Cases

United States Supreme Court: putting a limitation on a Congressional Statute so as to limit the power of the federal government to declare a forfeiture and penalty (And, in the process, doing equity and rejecting several and joint liability as being "unfair" in this situation) Honeycutt v. United States, --- U.S. ----(June 7, 2017). But, is this an equitable case???

South Carolina State Cases

Chapman v. S.C. Department of Social Services, Opinion No. 5482 (S.C. App. 2017) (Wrongfully elevating "form over substance")

Davis, Jr. v. S.C. Department of Motor Vehicles, Op. No. 5484 (S.C. App. 2017) (The denial of "fundamental fairness" can be a breach of due process of law)

4.Fay v. Total Quality Logistics, LLC, Op. No. 5471 (S.C. App. 2017) (A violation of "public policy")

Rogers Townsend Thomas, PC v. Peck, et al (Op. No. 27707)

(Feb. 2017) (In the Original Jurisdiction of South Carolina Supreme Court) (The unauthorized practice of law by property managers & limitations on Permanent Injunctions)

6.Rodarte v. USC(Op. No. 27718 May, 2017)(when do you have an appropriate case for the equitable defense of equitable estoppel?) Reversing the Court of Appeals, and affirming the Circuit Court, the South Carolina Supreme Court (again) explains the situations where equitable estoppel should be applied.

Anderson County v. Preston, Op. No. 5490 (S.C. App.2017)

Filed May 31, 2017 (Heard June 11, 2015) (almost two full years between the argument in this case and the decision) Notwithstanding that somewhat unusual delay, this is a major equity case in 2017 which addresses all of the following equitable issues:

Question of fiduciaryduty
< >Absence of a Quorum on aBoard
Limitations on Fashioning An EquitableRemedy
< >Adequate Remedy atLaw
< >Wachesaw Plantation East Community Services Association,Inc.

v. Alexander, (S.C.App. July 2017) (homeowner fails to convince the Court of Appeals to use an equitable argument concerning the sale of his own home) (sale is considered finalized when deposit is paid)

South Carolina Federal District Court Cases

T&S Brass & Bronze Works, Inc. v. Stanina, --- F.Supp. -- (D.S.C. 2017) Preliminary Injunction (Arbitration Clause) (Injunctive Relief) (preliminary injnction available outside of arbitration under the parties distribution agreement).

Unjust Enrichment, CSX Transportation, Inc. v. Baltimore & Annaopolis RR Co. (Lawyers Weekly No. 002-144-17) The Honorable R. Bryan Harwell, J.) D.S.C. (Plaintiff properly states a claim for unjust enrichment and factual disputes exist that prevent the Court from granting summary judgment)

Equitable Indemnification, Flexi-Van Leasing, Inc. v. US Services, LLC (Lawyers Weekly No. 002-146-17) The Honorable R. Bryan Harwell, J.) D.S.C. (Plaintiff has pled sufficient facts to claim

relief against the Defendant based on its own equitable indemnification claim; motion to dismiss denied

Justice George James, Jr.

Justice James will be speaking his years on the bench and the preparation, knowledge and hard work necessary for all areas of law practice and effective judicial performance. He will speak to us regarding how the practice of law has changed over the years and how he perceives lawyers treating each other.