These materials may not be reproduced in whole or in part without the express written permission of the individual speaker.
Materials from Guy Vitteta, Esquire
Palmetto Automated Child Support System
Congress passed the Family Support Act of 1988 (FSA 88 Public Law (P.L.) 100-485), enacted October 13, 1988, mandating the implementation of automated child support systems in every state; requiring that such systems be fully operational not later than October 1, 1995;
South Carolina is the only state not in compliance.
Since August 2016 Xerox has been working with DSS to transfer and implement in South Carolina a federally certified Child Support system in use by the State of Delaware. It is called the Palmetto Automated Child Support System (PACSS).
Xerox will also implement a Family Court Case Management System (FCCMS) to be used by County Clerks of Court throughout the state. The performance period of the Xerox contract is 4 years with implementation scheduled for both systems in 2019.
Implemented October 1, 2018 in Aiken, Fairfield, Sumter and York counties and will be phased in state wide over the next 10 months. PACSS will create uniform system of electronic child support case management throughout South Carolina and the other 49 states in the United States. PACSS sets certain minimum requirements that each state must meet, in order to be certified, regarding the collection, storage and use of child support data.
A key objective of PACSS is that the system must electronically interface with all appropriate sources to obtain, locate, and verify assets and other information on the noncustodial/putative parent or custodial parent. Each system must have automated interfaces with federal, interstate, and intrastate sources and the ability to interface with other government agencies when necessary.
As PACSS is being implemented in South Carolina the Supreme Court is mandating the use of certain revised child support forms (Appendix A).
It is estimated that tens of billions of dollars are owed to custodial parents in the United States. It is hoped that PACSS will greatly add in child support management and enforcement in South Carolina.
ALIMONY
What's new in the 2018 Tax Law:
The 2018 tax law is a significant change from prior tax law as it relates to Family Law.
• Most provisions took effect 1.1.2018.
• Almost all changes for households expire in 2023.
• Almost all changes for corporations are permanent.
• Chained CPI is not used to measure inflation. Chained CPI is a way to index spending and taxes -- including Social Security benefits -- to the rate of inflation, or the rise in prices over time. But it's not the only way.
• Marriage penalty eliminated for households under $600,000.
• Certain high income Single ($370,000-$451,000) and HOH (250,000-552,000) filers may pay more.
• $4,150 deduction per dependent exemption is eliminated
• Use of child tax credit can be beneficial
• State and Local taxes limited (value assessed prior to 12.31.2017)
• Residence interest: Interest deduction limited to mortgages up to $750,000 for married/ jointly, half of this for married separate for home purchased prior to 12.15.2017.
• Refinances exempted as long as limited to the old indebtedness.
• Home Equity interest deduction eliminated if not used to buy, build or substantially improve the subject residence.
• Alimony:
• Eliminates the deduction and tax effect on income
• Filed after 12.31.2018
• Not applicable to decrees entered on or before 12.31.2018
• Not applicable to modifications after 12.31.18 provided that the order expressly states that the modified amount of alimony relates back to the original award (i.e. is not a new award, subject to the new rules).
• Will increase child support
• Increases the standard deduction
• Singe/Married Separate $6500 - $12,000
• HOH 9,550 - $18,000
• Married Jointly $13,000 - $24,000
Alimony in practice:
The possibility of permanent alimony fuels a great deal of family court litigation. South Carolina has a strong preference for periodic alimony, and absent exceptional circumstances, if the court finds alimony is appropriate, it will order periodic alimony.
On July 15, 2015 the South Carolina Court of Appeals in Ricigliano v Ricigliano reversed an award of rehabilitative alimony given to Husband by one of our resident Family Court judges. The Court of Appeals awarded Husband permanent alimony and sent the case back to the trial court only for a determination of the amount.
The court based it's ruling on a strict adherence to consideration of the required factors when making an award of alimony. If consideration of the 13 required factors leads to a finding of alimony, then courts are being told to award permanent alimony:
…the family court clearly erred in awarding Husband rehabilitative alimony. As noted, the law favors the award of permanent periodic alimony, and rehabilitative alimony may be awarded only in exceptional circumstances, when there has been a showing of special circumstances justifying a departure from the normal preference for permanent periodic support.
Ricigliano at 7
There has been some effort on the part of lawyers recently to argue for an “equalization of incomes” when alimony is an issue. The required alimony factors do not require a judge to seek, find, or in any way try to achieve an equalization of incomes. Clearly equalization is not the law, but the alimony factors really don't provide us with a rational way to arrive at a sufficient number, leaving lawyers to guess what may happen with any given set of facts.
Once periodic alimony has been ordered, it is always subject to modification based upon a change in circumstances. Lawyers typically argue that if a change in circumstances had been “anticipated” at the time of divorce, then it should not be the basis for a modification. For an excellent analysis of the requirements for modification of alimony, see Roof v. Steele, where the court found that the mere fact that a future event is anticipated will not automatically bar a subsequent request for modification of alimony:
In light of Calvert and subsequent Court of Appeals cases, courts usually consider only those changes that were unknown to the parties at the time of the separation decree in determining if a substantial change has occurred warranting a modification of alimony. The original divorce decree generally addresses these expected changes. However, there are some future changes which may be in contemplation of the parties at the time of the decree but, due to other *386 considerations, cannot be addressed at that time in the divorce decree.
Roof v. Steele, 396 S.C. 373, 385-86, 720 S.E.2d 910, 917 (Ct. App. 2011)
Children graduating (or leaving) High School many years down the road and becoming independent, thus ending child support, is clearly an anticipated event. However, Roof instructs that a future event, even if anticipated by all parties at the time of the divorce, may still be such that it will permit a subsequent modification based upon an analysis of the 13 alimony factors. The key here is not the mere fact that the future event is anticipated at the time of the divorce, but rather whether the future financial implications to the parties of the changed event can be adequately understood and addressed by the parties at the time of the divorce. If parties divorce when the children are 6 and 8 years old, certainly their eventual emancipation is clear to all at the time of the divorce, but it is simply not possible to anticipate all of the vagaries of the parties economic situation 10 and 8 years down the road.
CHILDREN'S ISSUES
The 2018 tax law made some significant changes that directly impact family law cases involving children. Most significantly was the elimination of the dependency exemption and the doubling of the child tax credit. (Exhibit A: Who Benefits From The Child Tax Credit Now?). Do lawyers treat this the same way as the former dependency exemption? Can we share the tax credit in alternating years?
Special rules apply for divorced or separated parents or parents who live apart. A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following apply:
1. The parents:
a. Are divorced or legally separated under a decree of divorce or separate maintenance,
b. Are separated under a written separation agreement, or
c. Lived apart at all times during the last 6 months of the tax year, whether or not they are or were married.
2. The child received over half of his or her support for the year from the parents.
3. The child is in the custody of one or both parents for more than half of the tax year.
4. Either of the following statements is true.
a. The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return.
How the Child Tax Credit Works:
As written, the child tax credit will be increased to $2,000 per qualifying child and will be refundable up to $1,400, subject to phaseouts. The bill also includes a temporary $500 nonrefundable credit for other qualifying dependents (for example, older adults). Phaseouts, which are not indexed for inflation, will begin with adjusted gross income of more than $400,000 for married taxpayers filing jointly and more than $200,000 for all other taxpayers.
When we think about tax breaks, we tend to lob tax credits and deductions into the same category, when in reality they're very different beasts. A tax deduction works by exempting a portion of your income from taxes, and your savings is based on your effective tax rate. So if you snag a $4,000 deduction, and your effective tax rate is 25%, that translates into $1,000 of actual savings.
A tax credit, on the other hand, is a dollar-for-dollar reduction of your tax liability, and your associated savings aren't dependent on your effective tax rate. In other words, a $1,000 tax credit is worth $1,000 to someone making $50,000 and someone making three times that amount -- which is why credits are so lucrative.
Claiming the Child Tax Credit for 2017
To claim the Child Tax Credit this year -- meaning, on your 2017 return -- you must have At least one child in the household under age 17 who was born before 2018. :
$75,000/ single filer.
$110,000/filing jointly.
$50 reduction in your credit per $1,000 of excess income, until the credit is wiped out completely.
Claiming the Child Tax Credit after 2018 +
$200,000 for single tax filers.
$400,000 for married couples filing jointly.
Remember, the Child Tax Credit is only one of many tax breaks available to parents, so even if you don't get to claim it right away, there may be other deductions or credits you're eligible for. And given the cost of raising kids these days, it pays to get your hands on as much money as you can.
Nearly doubles the standard deduction to $24,000 for married couples who file jointly and $12,000 for singles. (12,700/ $6,350).
Starting in 2018, the tax overhaul repeals personal exemptions, which are valued at $4,050 per taxpayer, spouse and dependent in 2017.
Families, especially those with multiple children and single-parent households, will keenly feel the loss of these exemptions, even though these tax breaks are supposed to return in 2025.
"Doubling the standard deduction is nice if you're a married couple with no kids," said Stan Veliotis, director of the Center for Professional Accounting Practices at Fordham University.
Value of exemptions
Under current law, a married couple with adjusted gross income of $75,000 and two kids would have a total of $16,600 in personal exemptions in 2018 (or $4,150 per person, due to inflation adjustments).
When including the standard deduction of $13,000 for married filing jointly, the filers' taxable income falls by $29,600, according to case studies from the Urban-Brookings Tax Policy Center.
Meanwhile, under the new tax bill, this same couple would have only the standard deduction of $24,000 for joint filers who are married.
The couple would benefit from the enhanced child tax credit, which will double to $2,000 per child under the GOP's tax overhaul.
In all, the family's taxes would fall by $2,119 in 2018, according to the Tax Policy Center.
"It's a trade-off: You lose the personal exemption, but you get a bigger child tax credit and standard deduction," said Howard Gleckman, senior fellow at the Tax Policy Center. "When all that goes away, you pay a little more."
Inflation indexes
By 2027, this hypothetical family with two kids would wind up paying an additional $150 in taxes, compared with what they'd pay under today's framework because the enhanced child tax credits — and a range of individual income tax provisions — expire in 2025, the Tax Policy Center found.
That family would also suffer because the tax overhaul changes the metric the IRS uses to adjust brackets, standard deductions and other details for inflation.
Today, inflation adjustments are based on the consumer price index.The bill, however, changes to the chained consumer price index, which rises more slowly.
In turn, this means the inflation increases for the standard deduction and the tax brackets would be less generous than they are now and could result in tax increases for filers in the future.
"The personal exemption will come back, but it becomes less valuable," Gleckman said. "It goes to the chained CPI and the increase for inflation will be smaller over time."
South Carolina uses the "Income Share Model".
South Carolina has adopted and uses the Income Share Model. This means that our guidelines try to reach a level of support for the child that is the same amount of support as if the parents lived together. The South Carolina Child Support Guidelines calculate each parent's percentage of income that would have been devoted to the child had the parents remained living together. The support obligation is pro-rated between the parents depending on their share of the total income. In other words, if a child’s custodial parent makes $2,000 a month and the noncustodial parent brings in $3,000, the noncustodial parent assumes 60% of the support obligation.
It is the responsibility of Social Services to establish the Guidelines:
(b) The department shall promulgate regulations which establish guidelines for minimum contributions which must be applied by the courts in determining the amount that an absent parent is expected to pay toward the support of a dependent child. Copies of the guidelines must be made available to courts, district attorneys, and to the public. The guidelines formulated pursuant to this section must be applied pursuant to the provisions of Section 63-17-470. S.C. Code Ann. § 43-5-580
“In determining the amount of child support, the family court is generally required to follow the child support guidelines; although the family court may deviate from the guidelines, any deviation must be justified and should be the exception rather than the rule.” LaFrance v LaFrance.
Be advised that the statute creates a reputable presumption that the Guidelines are correct!
Traditionally child support was calculated by hand in South Carolina by filling out the paper worksheets. As technology has developed the Guidelines have been automated. However, Attorneys sometimes wonder why the handwritten worksheets, the online DSS calculator and other calculators all differ slightly when using the same numbers. The simple answer is that the Guidelines are a written set of algebraic instructions that leave the actual calculations up to the user. Decimal place and rounding decisions will often cause the end result to vary slightly, yet all will be in a accord with South Carolina law ( See § 63-17-470; Sherman v. Sherman, 307 SC 280, Ct. App. 1992).
Unique Child Support Considerations
We are all accustomed to worksheets A, B and C of the South Carolina Child Support Guidelines. But what about situations that are not contemplated by the Guidelines, such as when a grandparent has custody of a child or cases where the parties’ incomes are in excess of the guidelines?
In order to provide a reasoned calculation upon which parties can form the basis of settlement discussions, certain software programs may be of assistance.
Settlyd is a cloud based software program that provides a way to calculate all of these scenario’s. If you have a case that falls squarely within the Guideline A, B or C, simply open your child support page on Settlyd and either select a worksheet that you have saved or open a new worksheet.
However, life rarely falls squarely within “Guidelines”, so Settlyd has provided you with several options options to help you quickly and precisely calculate child support for any circumstance that may arise with your clients.
Settlyd’s “Third Party Calculator” provides a way to calculate child support on behalf of a third party, such as a grandparent or aunt or uncle, who has become charged with the responsibility of raising a child.
While South Carolina has no mandated formula for determining child support when parties other than the parents have custody Settlyd bases the amounts on the existing guidelines, the applicable data requested on the calculator taking into account the varied approaches for tax credits based on third party custodial arrangements. The Court has the final authority to determine unique child support payment arrangements. Rather than generate mandated child support figures, the Settlyd Third Party child support calculator is provided to give practitioners and other Family Law professionals guidance in addressing such issues when they are present in individual cases.
Sometimes attorneys represent clients whose combined income is in excess of the Child Support income tables. Settlyd has created an “Excess Calculation” for these situations.
There is no mandated formula for determining child support in South Carolina when the parties combined monthly income exceeds $30,000. Rather such instances are to be determined on a "case-by-case basis". The Settlyd Excess Guidelines calculator provides two different calculations, both based on extrapolations from the existing South Carolina Child Support Guidelines, and is designed to provide practitioners foundational analysis for cases in which the parties' income exceeds the range specifically provided for by the Guidelines.
Palmetto Automated Child Support System
Congress passed the Family Support Act of 1988 (FSA 88 Public Law (P.L.) 100-485), enacted October 13, 1988, mandating the implementation of automated child support systems in every state; requiring that such systems be fully operational not later than October 1, 1995;
South Carolina is the only state not in compliance.
Since August 2016 Xerox has been working with DSS to transfer and implement in South Carolina a federally certified Child Support system in use by the State of Delaware. It is called the Palmetto Automated Child Support System (PACSS).
Xerox will also implement a Family Court Case Management System (FCCMS) to be used by County Clerks of Court throughout the state. The performance period of the Xerox contract is 4 years with implementation scheduled for both systems in 2019.
Implemented October 1, 2018 in Aiken, Fairfield, Sumter and York counties and will be phased in state wide over the next 10 months. PACSS will create uniform system of electronic child support case management throughout South Carolina and the other 49 states in the United States. PACSS sets certain minimum requirements that each state must meet, in order to be certified, regarding the collection, storage and use of child support data.
A key objective of PACSS is that the system must electronically interface with all appropriate sources to obtain, locate, and verify assets and other information on the noncustodial/putative parent or custodial parent. Each system must have automated interfaces with federal, interstate, and intrastate sources and the ability to interface with other government agencies when necessary.
As PACSS is being implemented in South Carolina the Supreme Court is mandating the use of certain revised child support forms (Appendix A).
It is estimated that tens of billions of dollars are owed to custodial parents in the United States. It is hoped that PACSS will greatly add in child support management and enforcement in South Carolina.
ALIMONY
What's new in the 2018 Tax Law:
The 2018 tax law is a significant change from prior tax law as it relates to Family Law.
• Most provisions took effect 1.1.2018.
• Almost all changes for households expire in 2023.
• Almost all changes for corporations are permanent.
• Chained CPI is not used to measure inflation. Chained CPI is a way to index spending and taxes -- including Social Security benefits -- to the rate of inflation, or the rise in prices over time. But it's not the only way.
• Marriage penalty eliminated for households under $600,000.
• Certain high income Single ($370,000-$451,000) and HOH (250,000-552,000) filers may pay more.
• $4,150 deduction per dependent exemption is eliminated
• Use of child tax credit can be beneficial
• State and Local taxes limited (value assessed prior to 12.31.2017)
• Residence interest: Interest deduction limited to mortgages up to $750,000 for married/ jointly, half of this for married separate for home purchased prior to 12.15.2017.
• Refinances exempted as long as limited to the old indebtedness.
• Home Equity interest deduction eliminated if not used to buy, build or substantially improve the subject residence.
• Alimony:
• Eliminates the deduction and tax effect on income
• Filed after 12.31.2018
• Not applicable to decrees entered on or before 12.31.2018
• Not applicable to modifications after 12.31.18 provided that the order expressly states that the modified amount of alimony relates back to the original award (i.e. is not a new award, subject to the new rules).
• Will increase child support
• Increases the standard deduction
• Singe/Married Separate $6500 - $12,000
• HOH 9,550 - $18,000
• Married Jointly $13,000 - $24,000
Alimony in practice:
The possibility of permanent alimony fuels a great deal of family court litigation. South Carolina has a strong preference for periodic alimony, and absent exceptional circumstances, if the court finds alimony is appropriate, it will order periodic alimony.
On July 15, 2015 the South Carolina Court of Appeals in Ricigliano v Ricigliano reversed an award of rehabilitative alimony given to Husband by one of our resident Family Court judges. The Court of Appeals awarded Husband permanent alimony and sent the case back to the trial court only for a determination of the amount.
The court based it's ruling on a strict adherence to consideration of the required factors when making an award of alimony. If consideration of the 13 required factors leads to a finding of alimony, then courts are being told to award permanent alimony:
…the family court clearly erred in awarding Husband rehabilitative alimony. As noted, the law favors the award of permanent periodic alimony, and rehabilitative alimony may be awarded only in exceptional circumstances, when there has been a showing of special circumstances justifying a departure from the normal preference for permanent periodic support.
Ricigliano at 7
There has been some effort on the part of lawyers recently to argue for an “equalization of incomes” when alimony is an issue. The required alimony factors do not require a judge to seek, find, or in any way try to achieve an equalization of incomes. Clearly equalization is not the law, but the alimony factors really don't provide us with a rational way to arrive at a sufficient number, leaving lawyers to guess what may happen with any given set of facts.
Once periodic alimony has been ordered, it is always subject to modification based upon a change in circumstances. Lawyers typically argue that if a change in circumstances had been “anticipated” at the time of divorce, then it should not be the basis for a modification. For an excellent analysis of the requirements for modification of alimony, see Roof v. Steele, where the court found that the mere fact that a future event is anticipated will not automatically bar a subsequent request for modification of alimony:
In light of Calvert and subsequent Court of Appeals cases, courts usually consider only those changes that were unknown to the parties at the time of the separation decree in determining if a substantial change has occurred warranting a modification of alimony. The original divorce decree generally addresses these expected changes. However, there are some future changes which may be in contemplation of the parties at the time of the decree but, due to other *386 considerations, cannot be addressed at that time in the divorce decree.
Roof v. Steele, 396 S.C. 373, 385-86, 720 S.E.2d 910, 917 (Ct. App. 2011)
Children graduating (or leaving) High School many years down the road and becoming independent, thus ending child support, is clearly an anticipated event. However, Roof instructs that a future event, even if anticipated by all parties at the time of the divorce, may still be such that it will permit a subsequent modification based upon an analysis of the 13 alimony factors. The key here is not the mere fact that the future event is anticipated at the time of the divorce, but rather whether the future financial implications to the parties of the changed event can be adequately understood and addressed by the parties at the time of the divorce. If parties divorce when the children are 6 and 8 years old, certainly their eventual emancipation is clear to all at the time of the divorce, but it is simply not possible to anticipate all of the vagaries of the parties economic situation 10 and 8 years down the road.
CHILDREN'S ISSUES
The 2018 tax law made some significant changes that directly impact family law cases involving children. Most significantly was the elimination of the dependency exemption and the doubling of the child tax credit. (Exhibit A: Who Benefits From The Child Tax Credit Now?). Do lawyers treat this the same way as the former dependency exemption? Can we share the tax credit in alternating years?
Special rules apply for divorced or separated parents or parents who live apart. A child will be treated as the qualifying child of his or her noncustodial parent (for purposes of claiming an exemption and the child tax credit, but not for the EIC) if all of the following apply:
1. The parents:
a. Are divorced or legally separated under a decree of divorce or separate maintenance,
b. Are separated under a written separation agreement, or
c. Lived apart at all times during the last 6 months of the tax year, whether or not they are or were married.
2. The child received over half of his or her support for the year from the parents.
3. The child is in the custody of one or both parents for more than half of the tax year.
4. Either of the following statements is true.
a. The custodial parent signs Form 8332 or a substantially similar statement that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches the form or statement to his or her return.
How the Child Tax Credit Works:
As written, the child tax credit will be increased to $2,000 per qualifying child and will be refundable up to $1,400, subject to phaseouts. The bill also includes a temporary $500 nonrefundable credit for other qualifying dependents (for example, older adults). Phaseouts, which are not indexed for inflation, will begin with adjusted gross income of more than $400,000 for married taxpayers filing jointly and more than $200,000 for all other taxpayers.
When we think about tax breaks, we tend to lob tax credits and deductions into the same category, when in reality they're very different beasts. A tax deduction works by exempting a portion of your income from taxes, and your savings is based on your effective tax rate. So if you snag a $4,000 deduction, and your effective tax rate is 25%, that translates into $1,000 of actual savings.
A tax credit, on the other hand, is a dollar-for-dollar reduction of your tax liability, and your associated savings aren't dependent on your effective tax rate. In other words, a $1,000 tax credit is worth $1,000 to someone making $50,000 and someone making three times that amount -- which is why credits are so lucrative.
Claiming the Child Tax Credit for 2017
To claim the Child Tax Credit this year -- meaning, on your 2017 return -- you must have At least one child in the household under age 17 who was born before 2018. :
$75,000/ single filer.
$110,000/filing jointly.
$50 reduction in your credit per $1,000 of excess income, until the credit is wiped out completely.
Claiming the Child Tax Credit after 2018 +
$200,000 for single tax filers.
$400,000 for married couples filing jointly.
Remember, the Child Tax Credit is only one of many tax breaks available to parents, so even if you don't get to claim it right away, there may be other deductions or credits you're eligible for. And given the cost of raising kids these days, it pays to get your hands on as much money as you can.
Nearly doubles the standard deduction to $24,000 for married couples who file jointly and $12,000 for singles. (12,700/ $6,350).
Starting in 2018, the tax overhaul repeals personal exemptions, which are valued at $4,050 per taxpayer, spouse and dependent in 2017.
Families, especially those with multiple children and single-parent households, will keenly feel the loss of these exemptions, even though these tax breaks are supposed to return in 2025.
"Doubling the standard deduction is nice if you're a married couple with no kids," said Stan Veliotis, director of the Center for Professional Accounting Practices at Fordham University.
Value of exemptions
Under current law, a married couple with adjusted gross income of $75,000 and two kids would have a total of $16,600 in personal exemptions in 2018 (or $4,150 per person, due to inflation adjustments).
When including the standard deduction of $13,000 for married filing jointly, the filers' taxable income falls by $29,600, according to case studies from the Urban-Brookings Tax Policy Center.
Meanwhile, under the new tax bill, this same couple would have only the standard deduction of $24,000 for joint filers who are married.
The couple would benefit from the enhanced child tax credit, which will double to $2,000 per child under the GOP's tax overhaul.
In all, the family's taxes would fall by $2,119 in 2018, according to the Tax Policy Center.
"It's a trade-off: You lose the personal exemption, but you get a bigger child tax credit and standard deduction," said Howard Gleckman, senior fellow at the Tax Policy Center. "When all that goes away, you pay a little more."
Inflation indexes
By 2027, this hypothetical family with two kids would wind up paying an additional $150 in taxes, compared with what they'd pay under today's framework because the enhanced child tax credits — and a range of individual income tax provisions — expire in 2025, the Tax Policy Center found.
That family would also suffer because the tax overhaul changes the metric the IRS uses to adjust brackets, standard deductions and other details for inflation.
Today, inflation adjustments are based on the consumer price index.The bill, however, changes to the chained consumer price index, which rises more slowly.
In turn, this means the inflation increases for the standard deduction and the tax brackets would be less generous than they are now and could result in tax increases for filers in the future.
"The personal exemption will come back, but it becomes less valuable," Gleckman said. "It goes to the chained CPI and the increase for inflation will be smaller over time."
South Carolina uses the "Income Share Model".
South Carolina has adopted and uses the Income Share Model. This means that our guidelines try to reach a level of support for the child that is the same amount of support as if the parents lived together. The South Carolina Child Support Guidelines calculate each parent's percentage of income that would have been devoted to the child had the parents remained living together. The support obligation is pro-rated between the parents depending on their share of the total income. In other words, if a child’s custodial parent makes $2,000 a month and the noncustodial parent brings in $3,000, the noncustodial parent assumes 60% of the support obligation.
It is the responsibility of Social Services to establish the Guidelines:
(b) The department shall promulgate regulations which establish guidelines for minimum contributions which must be applied by the courts in determining the amount that an absent parent is expected to pay toward the support of a dependent child. Copies of the guidelines must be made available to courts, district attorneys, and to the public. The guidelines formulated pursuant to this section must be applied pursuant to the provisions of Section 63-17-470. S.C. Code Ann. § 43-5-580
“In determining the amount of child support, the family court is generally required to follow the child support guidelines; although the family court may deviate from the guidelines, any deviation must be justified and should be the exception rather than the rule.” LaFrance v LaFrance.
Be advised that the statute creates a reputable presumption that the Guidelines are correct!
Traditionally child support was calculated by hand in South Carolina by filling out the paper worksheets. As technology has developed the Guidelines have been automated. However, Attorneys sometimes wonder why the handwritten worksheets, the online DSS calculator and other calculators all differ slightly when using the same numbers. The simple answer is that the Guidelines are a written set of algebraic instructions that leave the actual calculations up to the user. Decimal place and rounding decisions will often cause the end result to vary slightly, yet all will be in a accord with South Carolina law ( See § 63-17-470; Sherman v. Sherman, 307 SC 280, Ct. App. 1992).
Unique Child Support Considerations
We are all accustomed to worksheets A, B and C of the South Carolina Child Support Guidelines. But what about situations that are not contemplated by the Guidelines, such as when a grandparent has custody of a child or cases where the parties’ incomes are in excess of the guidelines?
In order to provide a reasoned calculation upon which parties can form the basis of settlement discussions, certain software programs may be of assistance.
Settlyd is a cloud based software program that provides a way to calculate all of these scenario’s. If you have a case that falls squarely within the Guideline A, B or C, simply open your child support page on Settlyd and either select a worksheet that you have saved or open a new worksheet.
However, life rarely falls squarely within “Guidelines”, so Settlyd has provided you with several options options to help you quickly and precisely calculate child support for any circumstance that may arise with your clients.
Settlyd’s “Third Party Calculator” provides a way to calculate child support on behalf of a third party, such as a grandparent or aunt or uncle, who has become charged with the responsibility of raising a child.
While South Carolina has no mandated formula for determining child support when parties other than the parents have custody Settlyd bases the amounts on the existing guidelines, the applicable data requested on the calculator taking into account the varied approaches for tax credits based on third party custodial arrangements. The Court has the final authority to determine unique child support payment arrangements. Rather than generate mandated child support figures, the Settlyd Third Party child support calculator is provided to give practitioners and other Family Law professionals guidance in addressing such issues when they are present in individual cases.
Sometimes attorneys represent clients whose combined income is in excess of the Child Support income tables. Settlyd has created an “Excess Calculation” for these situations.
There is no mandated formula for determining child support in South Carolina when the parties combined monthly income exceeds $30,000. Rather such instances are to be determined on a "case-by-case basis". The Settlyd Excess Guidelines calculator provides two different calculations, both based on extrapolations from the existing South Carolina Child Support Guidelines, and is designed to provide practitioners foundational analysis for cases in which the parties' income exceeds the range specifically provided for by the Guidelines.
Super CLE, February 11, 2019
The information herein 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.
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Steven Spitz, Esquire
A Quick Review of Fundamental Equity Principles
By Stephen Spitz
Stevens & Lee
151 Meeting Street
Charleston, SC 29401
Phone (843) 414-5085
Email sasp@stevenslee.com
11 Equitable Maxims
1. Equity will not suffer a wrong to be without a remedy[1]
2. Equity normally acts in personam not in rem[2]
3. Equity follows the law[3]
4. Equity is equality[4]
5. Equity regards as done as What Ought To Be Done[5]
6. Equity regards substance rather than Form[6]
7. Equity disfavors Forfeitures[7]
8. One who seeks equity should do equity
9. One who seeks equity should have clean hands
10. Equity does not favor those who sleep on their rights[8]
11. Honorable Roger Young & Stephen Spitz: Spitz’s Ultimate Equitable Maxim (“SUEM”): In Equity Good Guys Should Win and Bad Guys Should Lose 55 SCLR 175 (a law review article that has been cited in some 25 subsequent law reviews or cases)
Some Quick Equitable Defenses
1. Unclean Hands
2. Laches
3. Estoppel
4. Judicial Estoppel
5. Buckley v. Shealy
[1] But consider Key Corporate Capital v. County of Beaufort, 602 S.E.2d 104 (S.C. App. 2004) where on further review the Court of Appeals was squarely reversed by the Supreme Court by that Court’s conclusion that the maxim was not relevant on the facts of the case. But, also consider that some of the members of the Court of Appeals that decided the Key Corporate case are now on the Supreme Court raising the question which case is truly precedent.
[2] See Thornton v. Thornton, 492 S.E.2d 86 (S.C. 1997) (squarely recognizing this maxim)
[3] There are well recognized restraints on equity. Often, where the rights of the parties are expressly created by statute, the South Carolina Supreme Court declines to invoke an equitable remedy. See, for example, Santee Cooper v. S.C. Public Service Commission, 379 S.E.2d 119 (S.C. 1989) The rule is typically expressed that equity has no role to play unless the legal remedy is “inadequate” – or said in different words, a legal remedy is adequate when it exists and when it fits the situation. See Key Corporate Capital, 644 S.E.2d 675 (S.C. 2007) (A court’s equitable powers must yield in the face of an unambiguously worded statute)
[4] A court of equity often seeks to secure equality among persons who are equally obligated or who are equally entitled to claim a benefit. Instances of the application of this maxim may be found in the law of contribution and other situations.
[5] The Court regards as done that which, in fairness and good conscience, ought to be or should have been done. But there are limits – See American General Financial Services, Inc. v. Brown, 376 S.C. 580,658 S.E.2d 99 (S.C,2008) where the South Carolina Supreme Court held that the lower courts simply lack the discretion, in the matter of a mortgagee’s deficiency judgment, to outright deny such a deficiency judgment when (1) the complaint prays for a personal deficiency judgment; (2) the amount of the debt is fixed in the foreclosure decree; (3) the sale is insufficient to satisfy the entire debt. See also Wachovia Bank v. Coffey, 746 S.E.2d 35 (S.C. 2013) discussing the meaning of this equitable maxim.
[6] See, Regions Bank v. Wingard Properties INC. 745 S.E. 348 (SC. App. 2011) discussing equitable maxims in general and the equitable maxim, in particular, substance over form. We will talk about this case at the CLE and its continued relevance. See also Johnson v. Johnson, 372 S.E.2d 107 (SC App. 1988) (If the end result is equitable . . . specific factors found by the lower court, even if wrong, are irrelevant). Time permitting, we will discuss these two cases.
7 See Kirkiakides v, United Artists Communications, Inc., 312 S.C. 271, 440 S.E.2d 384 (S.C. 1994) ( the amount of rent past due was only $4,732, out of a total yearly rent fee of $59,379; the tenant’s breach was inadvertent, and not in bad faith, the tenant attempted to quickly cure as soon as the tenant was aware of the default, tenant had more than 20 years remaining on the lease, and the value of its improvements to the leasehold had already been S1,200,000 dollars. This is an important case, and time permitting, we will certainly discuss in the CLE.
[8] The doctrine of laches is a very familiar one.
By Stephen Spitz
Stevens & Lee
151 Meeting Street
Charleston, SC 29401
Phone (843) 414-5085
Email sasp@stevenslee.com
11 Equitable Maxims
1. Equity will not suffer a wrong to be without a remedy[1]
2. Equity normally acts in personam not in rem[2]
3. Equity follows the law[3]
4. Equity is equality[4]
5. Equity regards as done as What Ought To Be Done[5]
6. Equity regards substance rather than Form[6]
7. Equity disfavors Forfeitures[7]
8. One who seeks equity should do equity
9. One who seeks equity should have clean hands
10. Equity does not favor those who sleep on their rights[8]
11. Honorable Roger Young & Stephen Spitz: Spitz’s Ultimate Equitable Maxim (“SUEM”): In Equity Good Guys Should Win and Bad Guys Should Lose 55 SCLR 175 (a law review article that has been cited in some 25 subsequent law reviews or cases)
Some Quick Equitable Defenses
1. Unclean Hands
2. Laches
3. Estoppel
4. Judicial Estoppel
5. Buckley v. Shealy
[1] But consider Key Corporate Capital v. County of Beaufort, 602 S.E.2d 104 (S.C. App. 2004) where on further review the Court of Appeals was squarely reversed by the Supreme Court by that Court’s conclusion that the maxim was not relevant on the facts of the case. But, also consider that some of the members of the Court of Appeals that decided the Key Corporate case are now on the Supreme Court raising the question which case is truly precedent.
[2] See Thornton v. Thornton, 492 S.E.2d 86 (S.C. 1997) (squarely recognizing this maxim)
[3] There are well recognized restraints on equity. Often, where the rights of the parties are expressly created by statute, the South Carolina Supreme Court declines to invoke an equitable remedy. See, for example, Santee Cooper v. S.C. Public Service Commission, 379 S.E.2d 119 (S.C. 1989) The rule is typically expressed that equity has no role to play unless the legal remedy is “inadequate” – or said in different words, a legal remedy is adequate when it exists and when it fits the situation. See Key Corporate Capital, 644 S.E.2d 675 (S.C. 2007) (A court’s equitable powers must yield in the face of an unambiguously worded statute)
[4] A court of equity often seeks to secure equality among persons who are equally obligated or who are equally entitled to claim a benefit. Instances of the application of this maxim may be found in the law of contribution and other situations.
[5] The Court regards as done that which, in fairness and good conscience, ought to be or should have been done. But there are limits – See American General Financial Services, Inc. v. Brown, 376 S.C. 580,658 S.E.2d 99 (S.C,2008) where the South Carolina Supreme Court held that the lower courts simply lack the discretion, in the matter of a mortgagee’s deficiency judgment, to outright deny such a deficiency judgment when (1) the complaint prays for a personal deficiency judgment; (2) the amount of the debt is fixed in the foreclosure decree; (3) the sale is insufficient to satisfy the entire debt. See also Wachovia Bank v. Coffey, 746 S.E.2d 35 (S.C. 2013) discussing the meaning of this equitable maxim.
[6] See, Regions Bank v. Wingard Properties INC. 745 S.E. 348 (SC. App. 2011) discussing equitable maxims in general and the equitable maxim, in particular, substance over form. We will talk about this case at the CLE and its continued relevance. See also Johnson v. Johnson, 372 S.E.2d 107 (SC App. 1988) (If the end result is equitable . . . specific factors found by the lower court, even if wrong, are irrelevant). Time permitting, we will discuss these two cases.
7 See Kirkiakides v, United Artists Communications, Inc., 312 S.C. 271, 440 S.E.2d 384 (S.C. 1994) ( the amount of rent past due was only $4,732, out of a total yearly rent fee of $59,379; the tenant’s breach was inadvertent, and not in bad faith, the tenant attempted to quickly cure as soon as the tenant was aware of the default, tenant had more than 20 years remaining on the lease, and the value of its improvements to the leasehold had already been S1,200,000 dollars. This is an important case, and time permitting, we will certainly discuss in the CLE.
[8] The doctrine of laches is a very familiar one.
Kathleen Barnes, Esquire
Appellate Case Law Update and Appellate Practice Strategy
I. Appellate Case Law Update with discussion of case facts and important procedural and substantive holdings *(other cases to be added as opinions are released up until the CLE)*
a. Procedure
i. Wells Fargo Bank, N.A. v. Fallon Properties, 422 S.C. 211, 810 S.E.2d 856 (2018) – email sent from Court, attorney, or party triggers time to file notice of appeal, decision applies prospectively
ii. Overland, Inc. v. Nance, 423 S.C. 253, 815 S.E.2d 431 (2018) – the ten-day deadline in Rule 59(e), SCRCP, is absolute and a judge cannot alter or amend an order after that time or grant a party an extension to file a motion to alter or amend after that time
iii. Horton v. Jasper County Sch. Dist., 423 S.C. 325, 815 S.E.2d 442 (2018) – reversed award of attorney’s fees that decreased hourly rate without explanation or opposing evidence; Court may reduce rate but only with supporting evidence; Supreme Court awarded amount requested because opposing party failed to present opposing evidence
iv. Gary v. Askew, 423 S.C. 47, 813 S.E.2d 717 (2018) – summary judgment is premature when parties have not had an opportunity to conduct significant
2
discovery; Supreme Court vacated Court of Appeals’ opinion on substantive legal issues and remanded based on prematurity finding
v. Sullivan v. Brown (In re Estate of Kay), 423 S.C. 476, 816 S.E.2d 542 (2018) – the two-judge rule does not apply to a decision of a probate judge that is affirmed by a circuit court judge on appeal; the applicable standard of review is equitable, i.e., that an appellate court may take its own view of the preponderance of the evidence
vi. Gary v. Lowcountry Medical Transport, Inc., 424 S.C. 18, 817 S.E.2d 291 (2018) – the judicial doctrine that a party is bound to its pleadings is secondary to the overriding policy against bigamous marriages expressed by the General Assembly
b. Evidence
i. Hartsock v. Goodyear Dunlop Tires N. Am. Ltd., 422 S.C. 643, 813 S.E.2d 696 (2018) – South Carolina recognizes a qualified evidentiary privilege for trade secrets
c. Substantive Law
i. Torts
1. Sentry Select Ins. Co. v. Maybank Law Firm, LLC, 2018 WL 2423694 (2018) –Insurer may bring a direct legal malpractice action against counsel hired to represent its insured
a. Insurer may recover only for attorney’s breach of duty to client when insurer process the breach is the proximate cause of insurer’s damages
3
i. No direct action if inconsistency between interests of insured and insurer; question of law for the court
b. Clear and convincing evidence standard
ii. Insurance
1. GEICO v. Poole, 424 S.C. 1, 817 S.E.2d 283 (2018) – punitive damages do not have be apportioned pro rata between bodily injury and property damage under an automobile insurance policy
2. Buchanan v. S.C. Property & Casualty Ins. Guaranty Ass’n, 424 S.C. 542, 819 S.E.2d 124 (2018) – in an action seeking insurance proceeds from the Guaranty Association, any settlement amount from other defendants or insurers is offset from the total claimed amount of damages and not sfrom the $300,000.00 statutory cap on the Guaranty’s payment liability
II. Appellate Court Rules Amendments
a. Transcript Requests and Court Reporter communications
b. Format of Briefs
i. Standard of review requirement
c. Oral Argument
d. Petition for rehearing – no return required
e. Filing Fees
III. Appellate Procedure
a. Record on Appeal
i. What can be included?
4
ii. How to deal with an improper designation?
1. Procedure to correct designation and brief when counsel agree
2. Procedure to file a motion
iii. What if I forgot to include something in the Record on Appeal?
1. Rule 212 – Supplemental Record
2. By consent before argument
3. Upon motion without consent or after argument
4. Form – Appendix to the Record on Appeal
b. Motion to stay time limits
i. File with any motion except motion to dismiss or relieve counsel
ii. Include two filing fees
c. Supplemental Citations
i. Rule 208(b)(7)
ii. Form – letter to the Clerk setting forth citations, reference to page or section of brief to which citation pertains
1. Response – made promptly and similarly limited
IV. Appellate Tips Not in Writing
a. Request to reduce number of copies to be filed
b. Oral Argument
i. Order of issues to be argued
ii. Say it differently than the briefs
iii. Average wait time
1. 16 months for oral argument
5
2. 6-12 months for published decision
c. Call your case handler in the Clerk’s office
I. Appellate Case Law Update with discussion of case facts and important procedural and substantive holdings *(other cases to be added as opinions are released up until the CLE)*
a. Procedure
i. Wells Fargo Bank, N.A. v. Fallon Properties, 422 S.C. 211, 810 S.E.2d 856 (2018) – email sent from Court, attorney, or party triggers time to file notice of appeal, decision applies prospectively
ii. Overland, Inc. v. Nance, 423 S.C. 253, 815 S.E.2d 431 (2018) – the ten-day deadline in Rule 59(e), SCRCP, is absolute and a judge cannot alter or amend an order after that time or grant a party an extension to file a motion to alter or amend after that time
iii. Horton v. Jasper County Sch. Dist., 423 S.C. 325, 815 S.E.2d 442 (2018) – reversed award of attorney’s fees that decreased hourly rate without explanation or opposing evidence; Court may reduce rate but only with supporting evidence; Supreme Court awarded amount requested because opposing party failed to present opposing evidence
iv. Gary v. Askew, 423 S.C. 47, 813 S.E.2d 717 (2018) – summary judgment is premature when parties have not had an opportunity to conduct significant
2
discovery; Supreme Court vacated Court of Appeals’ opinion on substantive legal issues and remanded based on prematurity finding
v. Sullivan v. Brown (In re Estate of Kay), 423 S.C. 476, 816 S.E.2d 542 (2018) – the two-judge rule does not apply to a decision of a probate judge that is affirmed by a circuit court judge on appeal; the applicable standard of review is equitable, i.e., that an appellate court may take its own view of the preponderance of the evidence
vi. Gary v. Lowcountry Medical Transport, Inc., 424 S.C. 18, 817 S.E.2d 291 (2018) – the judicial doctrine that a party is bound to its pleadings is secondary to the overriding policy against bigamous marriages expressed by the General Assembly
b. Evidence
i. Hartsock v. Goodyear Dunlop Tires N. Am. Ltd., 422 S.C. 643, 813 S.E.2d 696 (2018) – South Carolina recognizes a qualified evidentiary privilege for trade secrets
c. Substantive Law
i. Torts
1. Sentry Select Ins. Co. v. Maybank Law Firm, LLC, 2018 WL 2423694 (2018) –Insurer may bring a direct legal malpractice action against counsel hired to represent its insured
a. Insurer may recover only for attorney’s breach of duty to client when insurer process the breach is the proximate cause of insurer’s damages
3
i. No direct action if inconsistency between interests of insured and insurer; question of law for the court
b. Clear and convincing evidence standard
ii. Insurance
1. GEICO v. Poole, 424 S.C. 1, 817 S.E.2d 283 (2018) – punitive damages do not have be apportioned pro rata between bodily injury and property damage under an automobile insurance policy
2. Buchanan v. S.C. Property & Casualty Ins. Guaranty Ass’n, 424 S.C. 542, 819 S.E.2d 124 (2018) – in an action seeking insurance proceeds from the Guaranty Association, any settlement amount from other defendants or insurers is offset from the total claimed amount of damages and not sfrom the $300,000.00 statutory cap on the Guaranty’s payment liability
II. Appellate Court Rules Amendments
a. Transcript Requests and Court Reporter communications
b. Format of Briefs
i. Standard of review requirement
c. Oral Argument
d. Petition for rehearing – no return required
e. Filing Fees
III. Appellate Procedure
a. Record on Appeal
i. What can be included?
4
ii. How to deal with an improper designation?
1. Procedure to correct designation and brief when counsel agree
2. Procedure to file a motion
iii. What if I forgot to include something in the Record on Appeal?
1. Rule 212 – Supplemental Record
2. By consent before argument
3. Upon motion without consent or after argument
4. Form – Appendix to the Record on Appeal
b. Motion to stay time limits
i. File with any motion except motion to dismiss or relieve counsel
ii. Include two filing fees
c. Supplemental Citations
i. Rule 208(b)(7)
ii. Form – letter to the Clerk setting forth citations, reference to page or section of brief to which citation pertains
1. Response – made promptly and similarly limited
IV. Appellate Tips Not in Writing
a. Request to reduce number of copies to be filed
b. Oral Argument
i. Order of issues to be argued
ii. Say it differently than the briefs
iii. Average wait time
1. 16 months for oral argument
5
2. 6-12 months for published decision
c. Call your case handler in the Clerk’s office
Harry Goldberg, Esquire
| goldberg_materials.pdf |
Barbara Seymour, Esquire: Ethics
SC Ethics and Discipline Update
Barbara M. Seymour
Clawson and Staubes, LLC
(800) 774-8242
barbara@cslaw.com
(1/20/2019)
Part I –Summaries of Disciplinary Opinions (p. 1)
Part II – Non-Disciplinary Cases of Interest (p. 5)
Part III – Recent Rule Revisions, Proposals, and Ethics Advisory Opinions (p. 7)
I. Summaries of Disciplinary Opinions
Criminal Conduct
(1) Matter of Newman. Lawyer pled guilty to two counts of failing to file state income tax returns and failing to pay state income taxes. Lawyer was also sanctioned for depositing an advance fee into his operating account without the required information in his fee agreement. He also failed to adequately maintain the financial records required by Rule 417, SCACR. Six Month Suspension (retroactive), plus costs and Ethics School. (Op.#27845, November 14, 2018)
(2) Matter of Meehan. Lawyer pled guilty to bank fraud in connection with allegations that she defrauded a sorority out of approximately $234,000.00. She was sentenced to six months in prison, 18 months of house arrest, and 40 months of probation. In addition to South Carolina, Lawyer was licensed in Texas and Tennessee. She entered into an agreement in Texas to resign in lieu of discipline (RILD). Lawyer failed to inform SC disciplinary authorities of her resignation in Texas, later arguing that she was not required to do so under SC Rule 29(a), RLDE, and that she was not subject to reciprocal discipline in SC for a RILD in Texas. The Supreme Court held that the Texas RILD was reportable in SC, but that reciprocal discipline in this state called for disbarment rather than RILD. In Texas, RILD is the equivalent of disbarment (the lawyer is eligible for readmission after five years) whereas in SC a lawyer is eligible for readmission after five years, but RILD is permanent. Disbarment. (Op.#
Sexual Misconduct
(3) Matter of Bledsoe. Lawyer represented a client in a child custody case. Lawyer told the client he wanted to have sex with her and asked her to show him her breasts, which she did to her shame and humiliation. Lawyer was also sanctioned for misrepresenting the directives of a judge in an order drafted in an unrelated custody case. Public Reprimand and Ethics School, by agreement. (Op.#27778, March 14, 2018)
(4) Matter of Swan. Lawyer made “sexually explicit and highly offensive” comments to female clients on the telephone while they were incarcerated. He also delivered electronic cigarettes to the clients twice, concealing the transfer from the cameras in the inmate visitation room. When one of the client’s was released from jail, Lawyer provided financial assistance and clothing to her and let her stay in his house. There was “no evidence” that he had sex with her or that he requested “sexual services in exchange for anything.” Public Reprimand, plus costs, by agreement. (Op.#27780, March 14, 2018)
Neglect of Client Matters
(5) Matter of Deslauriers. Lawyer was censured in Tennessee for neglecting a lawsuit involving a property damage claim. Lawyer was retained in August 2012, but filed nothing in the case and did not respond to the client's numerous requests for updates. In January 2015, Lawyer filed a complaint but never served it on the defendants. In March 2016, after another year of taking no action and failing to communicate with his client, the client's case was dismissed. Public Reprimand, reciprocal. (Op.#27788. April 4, 2018)
(6) Matter of Gorski. Lawyer resolved a domestic case for a client by agreement, which included a provision that Lawyer would prepare three QRDOs. By 2009, Lawyer had not completed the work. In another case, Lawyer failed to pay $2,500 to a client awarded by the Fee Disputes Resolution Board. Lawyer was also cited with neglecting two other client matters. Lawyer had extensive disciplinary history, including three letters of caution, a confidential admonition, and a public reprimand. Twelve Month Suspension, plus costs, by agreement. (Op.#27825, July 11, 2018)
(7) Matter of Durban. Lawyer neglected five domestic cases. Misconduct including failing to communicate with clients, failing to pursue client matters, failing to comply with an order of the Fee Disputes Resolution Board, and failing to pay a court reporter. Lawyer was also cited for lack of cooperation in the disciplinary investigation. Three Year Suspension (retroactive to the date of interim suspension), plus costs and Ethics School, Trust Account School, and Law Office Management School, by agreement. (Op.#27838, August 8, 2018)
(8) Matter of Brown. Lawyer neglected to respond to inquiries from ODC in ten disciplinary complaints. Lawyer explained that he had difficulty getting his mail. Lawyer had previously been confidentially admonished for similar problems. Lawyer was also cited for failing to adequately communicate with a client, a problem he attributed to his staff. Public Reprimand, plus costs and Ethics School, by agreement. (Op.#27852, December 5, 2018)
Trust Account Violations
(9) Matter of Yacobi. Lawyer disbursed proceeds from a workers’ comp settlement prior to collection of the funds. The settlement statement he prepared did not accurately reflect the disbursements made. In a family court case, Lawyer accepted a fee then failed to take action on behalf of the clients. He also failed to adequately supervise nonlawyer staff who allegedly intercepted and deleted communications from the clients and their new counsel attempting to get a refund of the fees. Lawyer was also sanctioned for failing to conduct monthly reconciliations of his trust account, failing to timely disburse funds, and overdrawing the account by careless bookkeeping practices. Lawyer had prior discipline and did not timely respond to ODC’s inquiries. Public Reprimand, plus costs, LEAPP, and trust account monitoring for two years, by agreement. (Op.#27779, March 14, 2018)
(10) Matter of Pyatt. Lawyer overdrew his trust account because he forgot to instruct his office manager to make a deposit. Lawyer also failed to comply with the monthly reconciliation requirements of Rule 417, SCACR. Public Reprimand, plus costs, Trust Account and Law Office Management Schools, and two years’ of trust account monitoring. (Op.#27846, November 14, 2018)
Litigation Misconduct
(11) Matter of Whitlark. Lawyer obtained a favorable verdict from a jury in a personal injury case. The evidence included documents and testimony from a treating physician. Upon collection of the judgment, Lawyer engaged in negotiations with the doctor to reduce the bill. Lawyer disbursed the proceeds of the case without holding the amount claimed by the doctor in trust during the negotiations. At some point, Lawyer determined that the charges had been inflated and some were even fraudulent. Lawyer failed to comply with Rule 3.3, which requires a lawyer to correct false statements to a tribunal and take “reasonable remedial measures” after learning that he presented false, material evidence. Lawyer was also sanctioned for failing to pay seven court reporter bills even after a default judgment was filed against him in a civil action brought by the court reporter and after notice from ODC. Six Month Suspension, plus costs and restitution. (Op.#27781, March 14, 2018)
Dishonesty and False Witnessing
(12) Matter of Kern. Lawyer was sanctioned by the SEC for activities related to his representation of two companies involved in a fraudulent investment scheme in which the companies’ principal (Berkman) solicited around $13 million from about 120 investors for the purpose of purchasing pre-IPO shares of social media stock. Berkman used a portion of the funds raised to pay off debts connected to his bankruptcy in Florida, which in turn, was used to avoid a $28 million judgment in Oregon based on a similar fraud perpetrated in that state. Lawyer signed an offer of settlement with the SEC to end its investigation of his involvement with the Berkman dealings. The resulting SEC order concluded that Lawyer willfully aided and abetted Berkman’s fraudulent conduct. Lawyer agreed to disgorge the $234,577 in fees he collected from the companies and pay a $100,000 fine. He also agreed to be barred from working with investment companies in the future and from practicing before the SEC. The Supreme Court declined to impose reciprocal discipline, finding that the SEC is not “another jurisdiction” for such purposes. However, the Court did find that Lawyer provided false information to third parties in the course of his representation of the entities. In one case, he falsely represented to Berkman’s bankruptcy lawyer that funds used to settle that case did not come from the investment companies, when in fact, $525,000 of investor funds were used for that purpose. In another instance, Lawyer issued a memo on behalf of one of the companies ensuring investors that Berkman was not orchestrating a Ponzi scheme and that their funds were secure. In fact, only $600,000 of the investments were actually used for legitimate investments. The rest was used to pay Berkman’s creditors, legal fees, and other personal expenses. In determining the sanction, the Court considered Lawyer’s prior disciplinary suspension for commingling, the fact that he had not paid the SEC as agreed, and his failure to cooperate in the disciplinary proceedings. 18 Month Suspension. (Op.#27820, June 27, 2018)
(13) Matter of Robinson. Lawyer submitted a client affidavit in connection with a request for an emergency hearing in a child custody case. The client had no knowledge of the affidavit. Lawyer forged the client’s name to the affidavit and notarized it. Nine Month Suspension, plus costs and Ethics School, by agreement. (Op.#27824, July 11, 2018)
(14) Matter of Erickson. In connection with his law practice in NC, Lawyer assisted clients in fraudulent mortgage-elimination and debt-elimination schemes, including providing improper legal advice, knowingly making false and misleading statements to the court, filing fraudulent documents, and making frivolous legal arguments. As a result, Lawyer’s NC law license was suspended for five years in 2008. He has since been reinstated. Five-Year Suspension, retroactive to 2008. (Dissenting Justice would not make the suspension retroactive.) (Op.#27844, October 31, 2018)
Conflicts of Interest
(15) Matter of Cooper. Lawyer’s Stepdaughter #1 opened a fraudulent account using Stepdaughter #2’s name without her permission. Arrest warrants were issued for Stepdaughter #2 in five counties as a result of bad checks written by Stepdaughter #1 on the account. Although she never formally made an appearance, Lawyer represented Stepdaughter #2 in defense of the charges. At the time, Stepdaughter #1 had confessed to Lawyer that she was the one who wrote the checks. After Stepdaughter #2 was released from jail, Stepdaughter #1 was arrested. Lawyer continued to assist Stepdaughter #2 and, at the same time, represented Stepdaughter #1. Lawyer shared information about Stepdaughter #2’s case with Stepdaughter #1. In the meantime, Lawyer’s daughter sought custody of Stepdaughter #1’s child. Stepdaughter #1 was represented in the custody matter by an attorney who worked for the same law firm as Lawyer. That attorney was unaware of Lawyer’s involvement in the pending criminal charges because Lawyer did not enter the information in the firm’s conflict checking system. The Court found that Lawyer’s simultaneous representation of her stepdaughters was a non-consentable conflict of interest. Lawyer was also sanctioned for withdrawing fees from her trust account in bankruptcy cases without court approval. The Bankruptcy Court ordered disgorgement of the fees over a 3 ½ year period. She was ultimately relieved of that obligation provided she did not practice in that court. Lawyer also failed to maintain the required trust account records or conduct monthly reconciliations. Public Reprimand, plus LEAPP and costs, by agreement. (Op.#27777, March 14, 2018)
Unauthorized Practice of Law
(16) Matter of Geer. While on suspension for not paying Bar dues, Lawyer filed pleadings in a civil case. In connection with that case, the court ordered Lawyer’s client to deliver all corporate funds to a receiver. Lawyer’s request for attorney’s fees was denied, but Lawyer collected the fees anyway. Lawyer was held in contempt, but did not pay the ordered sanctions and did not respond to inquiries from court staff. In another matter, Lawyer failed to file a Proof of Claim in a bankruptcy matter. There were sufficient assets to cover Lawyer’s client’s claim of over $31,000.00, but due to his neglect, it was time-barred. Lawyer was placed on interim suspension for not cooperating in the disciplinary investigation. The Supreme Court held him in contempt for failing to cooperate with the Receiver. Three Year Suspension, plus costs and restitution. (Op.#27787, March 28, 2018)
Judicial Misconduct
(17) Matter of Drose. Part-time magistrate was arrested for possession of oxycodone without a prescription. Public Reprimand, by agreement. Because Judge resigned, Public Reprimand is the most severe sanction available to the Court. Judge is also a lawyer, currently on interim suspension. (Op.#27813, June 13, 2018)
(18) Matter of Peeler. Probate judge engaged in misconduct by calling staff members “heifers” and “DW” (double-wide). Judge stated that these were just jokes, but admitted the comments were inappropriate. In an unrelated complaint, the judge received an insurance company check to pay for roof repairs. He improperly processed the funds through his court account. His stepson absconded with the money, resulting in a civil action by the roofing company against Judge. Citing significant prior confidential discipline and Judge’s voluntary resignation, the Court issued a Public Reprimand. (Op.#27830, August 22, 2018)
II. Nondisciplinary Cases of Interest
(1) Email Notice of Order Starts Clock on Appeal. The Court of Appeals issued an opinion finding that an email notice of entry of an order or judgment starts the clock on the time for serving a notice of appeal. On review, the Supreme Court agreed, holding that an email sent from the court, an attorney of record, or a party providing written notice of entry of an order or judgment triggers the time for serving a notice of appeal for purposes of Rule 203(b)(1), SCACR. The Court decided to apply the ruling prospectively because the issue was novel and prior case law had been inconsistent. Wells Fargo Bank v. Fallon Properties, Op.#27773 (February 28, 2018)
(2) Insured is the Only Client, But Insurer Can Sue for Malpractice. The Supreme Court of South Carolina answered a question of law posed by the federal district court regarding an insurance defense lawyer’s duties to the insurance company. In this legal malpractice case, the insurance company paid a settlement of $900,000.00 after the lawyer it hired to defend its insured failed to respond to request to admit. The defense lawyer challenged the standing of the insurance company to sue for malpractice. Our Supreme Court held that the insured is the only client in the insurance defense representation and that the defense attorney owes no legal duty to the insurance company (thereby adopting the “One Client Model”). However, the Court determined that the insurance company could maintain a direct malpractice action against the lawyer, but only if the lawyer’s breach of his duty to the insured/client caused damages to the insurance company. Sentry Select Ins. Co. v. Maybank Law Firm, LLC, et al., Op.#27806 (May 30, 2018) (Rehearing pending.)
(3) No Screen Might Be Adequate Screening. The Court of Appeals upheld a trial judge’s decision to deny a public defender’s motion to be relieved as counsel. The PD’s direct supervisor represented one of the prosecution’s witnesses in securing a deal for his testimony against the defendant. The conflict was not discovered until the prosecution disclosed its witness list one week prior to trial. Both the PD and the defendant sought removal. The PD also asked for a continuance because she had not had the opportunity to thoroughly review evidence, also not produced by the prosecutor until the week before trial. Ordinarily, a lawyer would be prohibited from representing a client if another lawyer in the firm represented a witness in a deal securing the witness’s testimony against the client. Rule 1.0(e) provides an exception for PD offices if the lawyers are timely screened from each other’s cases and the lawyers retain authority over the objectives of their respective cases. Here, the Court of Appeals found that even though there was insufficient notice of the conflict to create “an adequate screening mechanism” because “no confidential information was disseminated or received” by the PD, removal was not necessary. State v. Wright, Op.#5579 (August 1, 2018)
(4) Reminder of Duty to Prepare Complete PCR Orders. The Supreme Court dismissed a PCR appeal and remanded the case to the circuit court judge who failed to address each of the applicant’s claims or include specific findings of fact or conclusions of law. The Court took the opportunity to remind judges of their obligations in these matters and to advise that “Counsel preparing proposed orders should be meticulous in doing so, opposing counsel should call any omissions to the attention of the PCR judge prior to issuance of the order, and the PCR judge should carefully review the order prior to signing it. Even after an order is filed, counsel has an obligation to review the order and file a Rule 59(e), SCRCP, motion to alter or amend if the order fails to set forth the findings and the reasons for those findings as required by § 17-27-80 and Rule 52(a), SCRCP.” Reese v. State, Supreme Court Order (October 18, 2018)
(5) Fee Dispute Provisions in Retainer Agreements Are Not Arbitration Clauses. Lawyer included a provision in her fee agreement that disputes over fees would be submitted to the SC Bar’s Resolution of Fee Disputes Board. Client did not dispute the fee, but rather simply failed to pay it. Lawyer sued Client to collect the bill. Client counterclaimed and defended, in part, with a dispute about the fee. Once this dispute arose, Lawyer requested that the matter be sent to the RFDB. Client appealed the trial court’s order of referral. The SC Court of Appeals affirmed, holding that RFDB provisions written in “plain language capable of legal construction” are binding and that the SC Uniform Arbitration Act does not apply. Derrick v. Moore, Op.#5618 (January 23, 2019)
Barbara M. Seymour
Clawson and Staubes, LLC
(800) 774-8242
barbara@cslaw.com
(1/20/2019)
Part I –Summaries of Disciplinary Opinions (p. 1)
Part II – Non-Disciplinary Cases of Interest (p. 5)
Part III – Recent Rule Revisions, Proposals, and Ethics Advisory Opinions (p. 7)
I. Summaries of Disciplinary Opinions
Criminal Conduct
(1) Matter of Newman. Lawyer pled guilty to two counts of failing to file state income tax returns and failing to pay state income taxes. Lawyer was also sanctioned for depositing an advance fee into his operating account without the required information in his fee agreement. He also failed to adequately maintain the financial records required by Rule 417, SCACR. Six Month Suspension (retroactive), plus costs and Ethics School. (Op.#27845, November 14, 2018)
(2) Matter of Meehan. Lawyer pled guilty to bank fraud in connection with allegations that she defrauded a sorority out of approximately $234,000.00. She was sentenced to six months in prison, 18 months of house arrest, and 40 months of probation. In addition to South Carolina, Lawyer was licensed in Texas and Tennessee. She entered into an agreement in Texas to resign in lieu of discipline (RILD). Lawyer failed to inform SC disciplinary authorities of her resignation in Texas, later arguing that she was not required to do so under SC Rule 29(a), RLDE, and that she was not subject to reciprocal discipline in SC for a RILD in Texas. The Supreme Court held that the Texas RILD was reportable in SC, but that reciprocal discipline in this state called for disbarment rather than RILD. In Texas, RILD is the equivalent of disbarment (the lawyer is eligible for readmission after five years) whereas in SC a lawyer is eligible for readmission after five years, but RILD is permanent. Disbarment. (Op.#
Sexual Misconduct
(3) Matter of Bledsoe. Lawyer represented a client in a child custody case. Lawyer told the client he wanted to have sex with her and asked her to show him her breasts, which she did to her shame and humiliation. Lawyer was also sanctioned for misrepresenting the directives of a judge in an order drafted in an unrelated custody case. Public Reprimand and Ethics School, by agreement. (Op.#27778, March 14, 2018)
(4) Matter of Swan. Lawyer made “sexually explicit and highly offensive” comments to female clients on the telephone while they were incarcerated. He also delivered electronic cigarettes to the clients twice, concealing the transfer from the cameras in the inmate visitation room. When one of the client’s was released from jail, Lawyer provided financial assistance and clothing to her and let her stay in his house. There was “no evidence” that he had sex with her or that he requested “sexual services in exchange for anything.” Public Reprimand, plus costs, by agreement. (Op.#27780, March 14, 2018)
Neglect of Client Matters
(5) Matter of Deslauriers. Lawyer was censured in Tennessee for neglecting a lawsuit involving a property damage claim. Lawyer was retained in August 2012, but filed nothing in the case and did not respond to the client's numerous requests for updates. In January 2015, Lawyer filed a complaint but never served it on the defendants. In March 2016, after another year of taking no action and failing to communicate with his client, the client's case was dismissed. Public Reprimand, reciprocal. (Op.#27788. April 4, 2018)
(6) Matter of Gorski. Lawyer resolved a domestic case for a client by agreement, which included a provision that Lawyer would prepare three QRDOs. By 2009, Lawyer had not completed the work. In another case, Lawyer failed to pay $2,500 to a client awarded by the Fee Disputes Resolution Board. Lawyer was also cited with neglecting two other client matters. Lawyer had extensive disciplinary history, including three letters of caution, a confidential admonition, and a public reprimand. Twelve Month Suspension, plus costs, by agreement. (Op.#27825, July 11, 2018)
(7) Matter of Durban. Lawyer neglected five domestic cases. Misconduct including failing to communicate with clients, failing to pursue client matters, failing to comply with an order of the Fee Disputes Resolution Board, and failing to pay a court reporter. Lawyer was also cited for lack of cooperation in the disciplinary investigation. Three Year Suspension (retroactive to the date of interim suspension), plus costs and Ethics School, Trust Account School, and Law Office Management School, by agreement. (Op.#27838, August 8, 2018)
(8) Matter of Brown. Lawyer neglected to respond to inquiries from ODC in ten disciplinary complaints. Lawyer explained that he had difficulty getting his mail. Lawyer had previously been confidentially admonished for similar problems. Lawyer was also cited for failing to adequately communicate with a client, a problem he attributed to his staff. Public Reprimand, plus costs and Ethics School, by agreement. (Op.#27852, December 5, 2018)
Trust Account Violations
(9) Matter of Yacobi. Lawyer disbursed proceeds from a workers’ comp settlement prior to collection of the funds. The settlement statement he prepared did not accurately reflect the disbursements made. In a family court case, Lawyer accepted a fee then failed to take action on behalf of the clients. He also failed to adequately supervise nonlawyer staff who allegedly intercepted and deleted communications from the clients and their new counsel attempting to get a refund of the fees. Lawyer was also sanctioned for failing to conduct monthly reconciliations of his trust account, failing to timely disburse funds, and overdrawing the account by careless bookkeeping practices. Lawyer had prior discipline and did not timely respond to ODC’s inquiries. Public Reprimand, plus costs, LEAPP, and trust account monitoring for two years, by agreement. (Op.#27779, March 14, 2018)
(10) Matter of Pyatt. Lawyer overdrew his trust account because he forgot to instruct his office manager to make a deposit. Lawyer also failed to comply with the monthly reconciliation requirements of Rule 417, SCACR. Public Reprimand, plus costs, Trust Account and Law Office Management Schools, and two years’ of trust account monitoring. (Op.#27846, November 14, 2018)
Litigation Misconduct
(11) Matter of Whitlark. Lawyer obtained a favorable verdict from a jury in a personal injury case. The evidence included documents and testimony from a treating physician. Upon collection of the judgment, Lawyer engaged in negotiations with the doctor to reduce the bill. Lawyer disbursed the proceeds of the case without holding the amount claimed by the doctor in trust during the negotiations. At some point, Lawyer determined that the charges had been inflated and some were even fraudulent. Lawyer failed to comply with Rule 3.3, which requires a lawyer to correct false statements to a tribunal and take “reasonable remedial measures” after learning that he presented false, material evidence. Lawyer was also sanctioned for failing to pay seven court reporter bills even after a default judgment was filed against him in a civil action brought by the court reporter and after notice from ODC. Six Month Suspension, plus costs and restitution. (Op.#27781, March 14, 2018)
Dishonesty and False Witnessing
(12) Matter of Kern. Lawyer was sanctioned by the SEC for activities related to his representation of two companies involved in a fraudulent investment scheme in which the companies’ principal (Berkman) solicited around $13 million from about 120 investors for the purpose of purchasing pre-IPO shares of social media stock. Berkman used a portion of the funds raised to pay off debts connected to his bankruptcy in Florida, which in turn, was used to avoid a $28 million judgment in Oregon based on a similar fraud perpetrated in that state. Lawyer signed an offer of settlement with the SEC to end its investigation of his involvement with the Berkman dealings. The resulting SEC order concluded that Lawyer willfully aided and abetted Berkman’s fraudulent conduct. Lawyer agreed to disgorge the $234,577 in fees he collected from the companies and pay a $100,000 fine. He also agreed to be barred from working with investment companies in the future and from practicing before the SEC. The Supreme Court declined to impose reciprocal discipline, finding that the SEC is not “another jurisdiction” for such purposes. However, the Court did find that Lawyer provided false information to third parties in the course of his representation of the entities. In one case, he falsely represented to Berkman’s bankruptcy lawyer that funds used to settle that case did not come from the investment companies, when in fact, $525,000 of investor funds were used for that purpose. In another instance, Lawyer issued a memo on behalf of one of the companies ensuring investors that Berkman was not orchestrating a Ponzi scheme and that their funds were secure. In fact, only $600,000 of the investments were actually used for legitimate investments. The rest was used to pay Berkman’s creditors, legal fees, and other personal expenses. In determining the sanction, the Court considered Lawyer’s prior disciplinary suspension for commingling, the fact that he had not paid the SEC as agreed, and his failure to cooperate in the disciplinary proceedings. 18 Month Suspension. (Op.#27820, June 27, 2018)
(13) Matter of Robinson. Lawyer submitted a client affidavit in connection with a request for an emergency hearing in a child custody case. The client had no knowledge of the affidavit. Lawyer forged the client’s name to the affidavit and notarized it. Nine Month Suspension, plus costs and Ethics School, by agreement. (Op.#27824, July 11, 2018)
(14) Matter of Erickson. In connection with his law practice in NC, Lawyer assisted clients in fraudulent mortgage-elimination and debt-elimination schemes, including providing improper legal advice, knowingly making false and misleading statements to the court, filing fraudulent documents, and making frivolous legal arguments. As a result, Lawyer’s NC law license was suspended for five years in 2008. He has since been reinstated. Five-Year Suspension, retroactive to 2008. (Dissenting Justice would not make the suspension retroactive.) (Op.#27844, October 31, 2018)
Conflicts of Interest
(15) Matter of Cooper. Lawyer’s Stepdaughter #1 opened a fraudulent account using Stepdaughter #2’s name without her permission. Arrest warrants were issued for Stepdaughter #2 in five counties as a result of bad checks written by Stepdaughter #1 on the account. Although she never formally made an appearance, Lawyer represented Stepdaughter #2 in defense of the charges. At the time, Stepdaughter #1 had confessed to Lawyer that she was the one who wrote the checks. After Stepdaughter #2 was released from jail, Stepdaughter #1 was arrested. Lawyer continued to assist Stepdaughter #2 and, at the same time, represented Stepdaughter #1. Lawyer shared information about Stepdaughter #2’s case with Stepdaughter #1. In the meantime, Lawyer’s daughter sought custody of Stepdaughter #1’s child. Stepdaughter #1 was represented in the custody matter by an attorney who worked for the same law firm as Lawyer. That attorney was unaware of Lawyer’s involvement in the pending criminal charges because Lawyer did not enter the information in the firm’s conflict checking system. The Court found that Lawyer’s simultaneous representation of her stepdaughters was a non-consentable conflict of interest. Lawyer was also sanctioned for withdrawing fees from her trust account in bankruptcy cases without court approval. The Bankruptcy Court ordered disgorgement of the fees over a 3 ½ year period. She was ultimately relieved of that obligation provided she did not practice in that court. Lawyer also failed to maintain the required trust account records or conduct monthly reconciliations. Public Reprimand, plus LEAPP and costs, by agreement. (Op.#27777, March 14, 2018)
Unauthorized Practice of Law
(16) Matter of Geer. While on suspension for not paying Bar dues, Lawyer filed pleadings in a civil case. In connection with that case, the court ordered Lawyer’s client to deliver all corporate funds to a receiver. Lawyer’s request for attorney’s fees was denied, but Lawyer collected the fees anyway. Lawyer was held in contempt, but did not pay the ordered sanctions and did not respond to inquiries from court staff. In another matter, Lawyer failed to file a Proof of Claim in a bankruptcy matter. There were sufficient assets to cover Lawyer’s client’s claim of over $31,000.00, but due to his neglect, it was time-barred. Lawyer was placed on interim suspension for not cooperating in the disciplinary investigation. The Supreme Court held him in contempt for failing to cooperate with the Receiver. Three Year Suspension, plus costs and restitution. (Op.#27787, March 28, 2018)
Judicial Misconduct
(17) Matter of Drose. Part-time magistrate was arrested for possession of oxycodone without a prescription. Public Reprimand, by agreement. Because Judge resigned, Public Reprimand is the most severe sanction available to the Court. Judge is also a lawyer, currently on interim suspension. (Op.#27813, June 13, 2018)
(18) Matter of Peeler. Probate judge engaged in misconduct by calling staff members “heifers” and “DW” (double-wide). Judge stated that these were just jokes, but admitted the comments were inappropriate. In an unrelated complaint, the judge received an insurance company check to pay for roof repairs. He improperly processed the funds through his court account. His stepson absconded with the money, resulting in a civil action by the roofing company against Judge. Citing significant prior confidential discipline and Judge’s voluntary resignation, the Court issued a Public Reprimand. (Op.#27830, August 22, 2018)
II. Nondisciplinary Cases of Interest
(1) Email Notice of Order Starts Clock on Appeal. The Court of Appeals issued an opinion finding that an email notice of entry of an order or judgment starts the clock on the time for serving a notice of appeal. On review, the Supreme Court agreed, holding that an email sent from the court, an attorney of record, or a party providing written notice of entry of an order or judgment triggers the time for serving a notice of appeal for purposes of Rule 203(b)(1), SCACR. The Court decided to apply the ruling prospectively because the issue was novel and prior case law had been inconsistent. Wells Fargo Bank v. Fallon Properties, Op.#27773 (February 28, 2018)
(2) Insured is the Only Client, But Insurer Can Sue for Malpractice. The Supreme Court of South Carolina answered a question of law posed by the federal district court regarding an insurance defense lawyer’s duties to the insurance company. In this legal malpractice case, the insurance company paid a settlement of $900,000.00 after the lawyer it hired to defend its insured failed to respond to request to admit. The defense lawyer challenged the standing of the insurance company to sue for malpractice. Our Supreme Court held that the insured is the only client in the insurance defense representation and that the defense attorney owes no legal duty to the insurance company (thereby adopting the “One Client Model”). However, the Court determined that the insurance company could maintain a direct malpractice action against the lawyer, but only if the lawyer’s breach of his duty to the insured/client caused damages to the insurance company. Sentry Select Ins. Co. v. Maybank Law Firm, LLC, et al., Op.#27806 (May 30, 2018) (Rehearing pending.)
(3) No Screen Might Be Adequate Screening. The Court of Appeals upheld a trial judge’s decision to deny a public defender’s motion to be relieved as counsel. The PD’s direct supervisor represented one of the prosecution’s witnesses in securing a deal for his testimony against the defendant. The conflict was not discovered until the prosecution disclosed its witness list one week prior to trial. Both the PD and the defendant sought removal. The PD also asked for a continuance because she had not had the opportunity to thoroughly review evidence, also not produced by the prosecutor until the week before trial. Ordinarily, a lawyer would be prohibited from representing a client if another lawyer in the firm represented a witness in a deal securing the witness’s testimony against the client. Rule 1.0(e) provides an exception for PD offices if the lawyers are timely screened from each other’s cases and the lawyers retain authority over the objectives of their respective cases. Here, the Court of Appeals found that even though there was insufficient notice of the conflict to create “an adequate screening mechanism” because “no confidential information was disseminated or received” by the PD, removal was not necessary. State v. Wright, Op.#5579 (August 1, 2018)
(4) Reminder of Duty to Prepare Complete PCR Orders. The Supreme Court dismissed a PCR appeal and remanded the case to the circuit court judge who failed to address each of the applicant’s claims or include specific findings of fact or conclusions of law. The Court took the opportunity to remind judges of their obligations in these matters and to advise that “Counsel preparing proposed orders should be meticulous in doing so, opposing counsel should call any omissions to the attention of the PCR judge prior to issuance of the order, and the PCR judge should carefully review the order prior to signing it. Even after an order is filed, counsel has an obligation to review the order and file a Rule 59(e), SCRCP, motion to alter or amend if the order fails to set forth the findings and the reasons for those findings as required by § 17-27-80 and Rule 52(a), SCRCP.” Reese v. State, Supreme Court Order (October 18, 2018)
(5) Fee Dispute Provisions in Retainer Agreements Are Not Arbitration Clauses. Lawyer included a provision in her fee agreement that disputes over fees would be submitted to the SC Bar’s Resolution of Fee Disputes Board. Client did not dispute the fee, but rather simply failed to pay it. Lawyer sued Client to collect the bill. Client counterclaimed and defended, in part, with a dispute about the fee. Once this dispute arose, Lawyer requested that the matter be sent to the RFDB. Client appealed the trial court’s order of referral. The SC Court of Appeals affirmed, holding that RFDB provisions written in “plain language capable of legal construction” are binding and that the SC Uniform Arbitration Act does not apply. Derrick v. Moore, Op.#5618 (January 23, 2019)
Desa Ballard, Esquire
RULE 1.8: CONFLICT OF INTEREST: CURRENT CLIENTS: SPECIFIC RULES
Comment Business Transactions Between Client and Lawyer
Financial Assistance
[10] Lawyers may not subsidize lawsuits or administrative proceedings brought on behalf of their clients, including making or guaranteeing loans to their clients for living expenses, because to do so would encourage clients to pursue lawsuits that might not otherwise be brought and because such assistance gives lawyers too great a financial stake in the litigation. These dangers do not warrant a prohibition on a lawyer lending a client court costs and litigation expenses, including the expenses of medical examination and the costs of obtaining and presenting evidence, because these advances are virtually indistinguishable from contingent fees and help ensure access to the courts. Similarly, an exception allowing lawyers representing indigent clients to pay court costs and litigation expenses regardless of whether these funds will be repaid is warranted.
Person Paying for a Lawyer's Services
- A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:
- the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
- the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and
- the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer's role in the transaction, including whether the lawyer is representing the client in the transaction.
- the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
- A lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these Rules.
- A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift unless the lawyer or other recipient of the gift is related to the client. For purposes of this paragraph, related persons include a spouse, child, grandchild, parent, grandparent or other relative or individual with whom the lawyer or the client maintains a close, familial relationship.
- Prior to the conclusion of representation of a client, a lawyer shall not make or negotiate an agreement giving the lawyer literary or media rights to a portrayal or account based in substantial part on information relating to the representation.
- A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:
- a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and
- a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client.
- a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; and
- A lawyer shall not accept compensation for representing a client from one other than the client unless:
- the client gives informed consent;
- there is no interference with the lawyer's independence of professional judgment or with the client-lawyer relationship; and
- information relating to representation of a client is protected as required by Rule 1.6.
- the client gives informed consent;
- A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing signed by the client. The lawyer's disclosure shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.
- A lawyer shall not:
- make an agreement prospectively limiting the lawyer's liability to a client for malpractice unless the client is independently represented in making the agreement; or
- settle a claim or potential claim for such liability with an unrepresented client or former client unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in connection therewith.
- make an agreement prospectively limiting the lawyer's liability to a client for malpractice unless the client is independently represented in making the agreement; or
- A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may:
- acquire a lien authorized by law to secure the lawyer's fee or expenses; and
- contract with a client for a reasonable contingent fee in a civil case.
- acquire a lien authorized by law to secure the lawyer's fee or expenses; and
- While lawyers are associated in a firm, a prohibition in the foregoing paragraphs (a) through (i) that applies to any one of them shall apply to all of them.
- A lawyer related to another lawyer as parent, child, sibling or spouse shall not personally represent a client in a representation directly adverse to a person whom the lawyer knows is represented by the other lawyer unless the client gives informed consent.
- In any adversarial proceeding, a lawyer shall not serve as both an advocate and an advisor to the hearing officer, trial judge or trier of fact. A lawyer serving as an advocate in a particular matter shall not directly or indirectly engage in an ex parte communication with the hearing officer, trial judge or trier of fact concerning the proceeding.
- A lawyer shall not have sexual relations with a client when the client is in a vulnerable condition or is otherwise subject to the control or undue influence of the lawyer, when such relations could have a harmful or prejudicial effect upon the interests of the client, or when sexual relations might adversely effect the lawyer’s representation of the client.
Comment Business Transactions Between Client and Lawyer
- A lawyer's legal skill and training, together with the relationship of trust and confidence between lawyer and client, create the possibility of overreaching when the lawyer participates in a business, property or financial transaction with a client, for example, a loan or sales transaction or a lawyer investment on behalf of a client. The requirements of paragraph (a) must be met even when the transaction is not closely related to the subject matter of the representation, as when a lawyer drafting a will for a client learns that the client needs money for unrelated expenses and offers to make a loan to the client. The Rule applies to lawyers engaged in the sale of goods or services related to the practice of law, for example, the sale of insurance or the provision of investment or fiduciary services to existing clients of the lawyer's legal practice. See Rule 5.7. It also applies to lawyers purchasing property from estates they represent. It does not apply to ordinary fee arrangements between client and lawyer, which are governed by Rule 1.5, although its requirements must be met when the lawyer accepts an interest in the client's business or other nonmonetary property as payment of all or part of a fee. In addition, the Rule does not apply to standard commercial transactions between the lawyer and the client for products or services that the client generally markets to others, for example, banking or brokerage services, medical services, products manufactured or distributed by the client, and utilities' services. In such transactions, the lawyer has no advantage in dealing with the client, and the restrictions in paragraph (a) are unnecessary and impracticable.
- Paragraph (a)(1) requires that the transaction itself be fair to the client and that its essential terms be communicated to the client, in writing, in a manner that can be reasonably understood. Paragraph (a)(2) requires that the client also be advised, in writing, of the desirability of seeking the advice of independent legal counsel. It also requires that the client be given a reasonable opportunity to obtain such advice. Paragraph (a)(3) requires that the lawyer obtain the client's informed consent, in a writing signed by the client, both to the essential terms of the transaction and to the lawyer's role. When necessary, the lawyer should discuss both the material risks of the proposed transaction, including any risk presented by the lawyer's involvement, and the existence of reasonably available alternatives and should explain why the advice of independent legal counsel is desirable. See Rule 1.0(g) (definition of informed consent).
- The risk to a client is greatest when the client expects the lawyer to represent the client in the transaction itself or when the lawyer's financial interest otherwise poses a significant risk that the lawyer's representation of the client will be materially limited by the lawyer's financial interest in the transaction. Here the lawyer's role requires that the lawyer must comply, not only with the requirements of paragraph (a), but also with the requirements of Rule 1.7. Under that Rule, the lawyer must disclose the risks associated with the lawyer's dual role as both legal adviser and participant in the transaction, such as the risk that the lawyer will structure the transaction or give legal advice in a way that favors the lawyer's interests at the expense of the client. Moreover, the lawyer must obtain the client's informed consent. In some cases, the lawyer's interest may be such that Rule 1.7 will preclude the lawyer from seeking the client's consent to the transaction.
- If the client is independently represented in the transaction, paragraph (a)(2) of this Rule is inapplicable, and the paragraph (a)(1) requirement for full disclosure is satisfied either by a written disclosure by the lawyer involved in the transaction or by the client's independent counsel. The fact that the client was independently represented in the transaction is relevant in determining whether the agreement was fair and reasonable to the client as paragraph (a)(1) further requires.
Use of Information Related to Representation - Use of information relating to the representation to the disadvantage of the client violates the lawyer's duty of loyalty. Paragraph (b) applies when the information is used to benefit either the lawyer or a third person, such as another client or business associate of the lawyer. For example, if a lawyer learns that a client intends to purchase and develop several parcels of land, the lawyer may not use that information to purchase one of the parcels in competition with the client or to recommend that another client make such a purchase. The Rule does not prohibit uses that do not disadvantage the client. For example, a lawyer who learns a government agency's interpretation of trade legislation during the representation of one client may properly use that information to benefit other clients. Paragraph (b) prohibits disadvantageous use of client information unless the client gives informed consent, except as permitted or required by these Rules. See Rules 1.2(d), 1.6, 1.9(c), 3.3, 4.1(b), 8.1 and 8.3.
- Gifts to Lawyers
- A lawyer may accept a gift from a client if the transaction meets general standards of fairness. For example, a simple gift such as a present given at a holiday or as a token of appreciation is permitted. If a client offers the lawyer a more substantial gift, paragraph (c) does not prohibit the lawyer from accepting it, although such a gift may be voidable by the client under the doctrine of undue influence, which treats client gifts as presumptively fraudulent. In any event, due to concerns about overreaching and imposition on clients, a lawyer may not suggest that a substantial gift be made to the lawyer or for the lawyer's benefit, except where the lawyer is related to the client as set forth in paragraph (c).
- If effectuation of a substantial gift requires preparing a legal instrument such as a will or conveyance, the client should have the detached advice that another lawyer can provide. The sole exception to this Rule is where the client is a relative of the donee.
- This Rule does not prohibit a lawyer from seeking to have the lawyer or a partner or associate of the lawyer named as executor of the client's estate or to another potentially lucrative fiduciary position if the lawyer complies with Rule 1.8. Nevertheless, such appointments will be subject to the general conflict of interest provision in Rule 1.7 when there is a significant risk that the lawyer's interest in obtaining the appointment will materially limit the lawyer's independent professional judgment in advising the client concerning the choice of an executor or other fiduciary. In obtaining the client's informed consent to the conflict, the lawyer should advise the client concerning the nature and extent of the lawyer's financial interest in the appointment, as well as the availability of alternative candidates for the position.
Literary Rights - An agreement by which a lawyer acquires literary or media rights concerning the conduct of the representation creates a conflict between the interests of the client and the personal interests of the lawyer. Measures suitable in the representation of the client may detract from the publication value of an account of the representation. Paragraph (d) does not prohibit a lawyer representing a client in a transaction concerning literary property from agreeing that the lawyer's fee shall consist of a share in ownership in the property, if the arrangement conforms to Rule 1.5 and paragraphs (a) and (i).
Financial Assistance
[10] Lawyers may not subsidize lawsuits or administrative proceedings brought on behalf of their clients, including making or guaranteeing loans to their clients for living expenses, because to do so would encourage clients to pursue lawsuits that might not otherwise be brought and because such assistance gives lawyers too great a financial stake in the litigation. These dangers do not warrant a prohibition on a lawyer lending a client court costs and litigation expenses, including the expenses of medical examination and the costs of obtaining and presenting evidence, because these advances are virtually indistinguishable from contingent fees and help ensure access to the courts. Similarly, an exception allowing lawyers representing indigent clients to pay court costs and litigation expenses regardless of whether these funds will be repaid is warranted.
Person Paying for a Lawyer's Services
- Lawyers are frequently asked to represent a client under circumstances in which a third person will compensate the lawyer, in whole or in part. The third person might be a relative or friend, an indemnitor (such as a liability insurance company) or a co-client (such as a corporation sued along with one or more of its employees). Because third-party payers frequently have interests that differ from those of the client, including interests in minimizing the amount spent on the representation and in learning how the representation is progressing, lawyers are prohibited from accepting or continuing such representations unless the lawyer determines that there will be no interference with the lawyer's independent professional judgment and there is informed consent from the client. See also Rule 5.4(c) (prohibiting interference with a lawyer's professional judgment by one who recommends, employs or pays the lawyer to render legal services for another).
- Sometimes, it will be sufficient for the lawyer to obtain the client's informed consent regarding the fact of the payment and the identity of the third-party payer. If, however, the fee arrangement creates a conflict of interest for the lawyer, then the lawyer must comply with Rule. 1.7. The lawyer must also conform to the requirements of Rule 1.6 concerning confidentiality. Under Rule 1.7(a), a conflict of interest exists if there is significant risk that the lawyer's representation of the client will be materially limited by the lawyer's own interest in the fee arrangement or by the lawyer's responsibilities to the third-party payer (for example, when the third-party payer is a co-client). Under Rule 1.7(b), the lawyer may accept or continue the representation with the informed consent of each affected client, unless the conflict is nonconsentable under that paragraph. Under Rule 1.7(b), the informed consent must be confirmed in writing.
Aggregate Settlements - Differences in willingness to make or accept an offer of settlement are among the risks of common representation of multiple clients by a single lawyer. Under Rule 1.7, this is one of the risks that should be discussed before undertaking the representation, as part of the process of obtaining the clients' informed consent. In addition, Rule 1.2(a) protects each client's right to have the final say in deciding whether to accept or reject an offer of settlement and in deciding whether to enter a guilty or nolo contendere plea in a criminal case. The rule stated in this paragraph is a corollary of both these Rules and provides that, before any settlement offer or plea bargain is made or accepted on behalf of multiple clients, the lawyer must inform each of them about all the material terms of the settlement, including what the other clients will receive or pay if the settlement or plea offer is accepted. See also Rule 1.0(g) (definition of informed consent). Lawyers representing a class of plaintiffs or defendants, or those proceeding derivatively, may not have a full client-lawyer relationship with each member of the class; nevertheless, such lawyers must comply with applicable rules regulating notification of class members and other procedural requirements designed to ensure adequate protection of the entire class.
Limiting Liability and Settling Malpractice Claims - Paragraph (h) is not intended to apply to customary qualifications and limitations in legal opinions and memoranda. Nevertheless, agreements prospectively limiting a lawyer's liability for malpractice are prohibited unless the client is independently represented in making the agreement because they are likely to undermine competent and diligent representation. Also, many clients are unable to evaluate the desirability of making such an agreement before a dispute has arisen, particularly if they are then represented by the lawyer seeking the agreement. This paragraph does not, however, prohibit a lawyer from entering into an agreement with the client to arbitrate legal malpractice claims, provided such agreements are enforceable and the client is fully informed of the scope and effect of the agreement. Nor does this paragraph limit the ability of lawyers to practice in the form of a limited- liability entity, where permitted by law, provided that each lawyer remains personally liable to the client for his or her own conduct and the firm complies with any conditions required by law, such as provisions requiring client notification or maintenance of adequate liability insurance. Nor does it prohibit an agreement in accordance with Rule 1.2 that defines the scope of the representation, although a definition of scope that makes the obligations of representation illusory will amount to an attempt to limit liability.
- Agreements settling a claim or a potential claim for malpractice are not prohibited by this Rule. Nevertheless, in view of the danger that a lawyer will take unfair advantage of an unrepresented client or former client, the lawyer must first advise such a person in writing of the appropriateness of independent representation in connection with such a settlement. In addition, the lawyer must give the client or former client a reasonable opportunity to find and consult independent counsel.
Family Relationships Between Lawyers - When lawyers representing different clients in the same matter or in substantially related matters are closely related by blood or marriage, there may be a significant risk that client confidences will be revealed and that the lawyer's family relationship will interfere with both loyalty and independent professional judgment. As a result, each client is entitled to know of the existence and implications of the relationship between the lawyers before the lawyer agrees to undertake the representation. Thus, a lawyer related to another lawyer, e.g., as parent, child, sibling or spouse, ordinarily may not represent a client in a matter where the related lawyer personally is representing another party, unless each client gives informed consent. The disqualification arising from a close family relationship is personal and ordinarily is not imputed to members of firms with whom the lawyers are associated. See Rule 1.10.
Acquiring Proprietary Interest in Litigation - Paragraph (i) states the traditional general rule that lawyers are prohibited from acquiring a proprietary interest in litigation. Like paragraph (e), the general rule has its basis in common law
champerty and maintenance and is designed to avoid giving the lawyer too great an interest in the representation. In addition, when the lawyer acquires an ownership interest in the subject of the representation, it will be more difficult for a client to discharge the lawyer if the client so desires. The Rule is subject to specific exceptions developed in decisional law and continued in these Rules. The exception for certain advances of the costs of litigation is set forth in paragraph (e). In addition, paragraph (i) sets forth exceptions for liens authorized by law to secure the lawyer's fees or expenses and contracts for reasonable contingent fees. The law of each jurisdiction determines which liens are authorized by law. These may include liens granted by statute, liens originating in common law and liens acquired by contract with the client. When a lawyer acquires by contract a security interest in property other than that recovered through the lawyer's efforts in the litigation, such an acquisition is a business or financial transaction with a client and is governed by the requirements of paragraph (a).
Contracts for contingent fees in civil cases are governed by Rule 1.5.
Imputation of Prohibitions - Under paragraph (j), a prohibition on conduct by an individual lawyer in paragraphs (a) through (i) also applies to all lawyers associated in a firm with the personally prohibited lawyer. For example, one lawyer in a firm may not enter into a business transaction with a client of another member of the firm without complying with paragraph (a), even if the first lawyer is not personally involved in the representation of the client. The prohibitions set forth in paragraphs (k) and (l) are personal and are not applied to associated lawyers.
Serving as an Advocate and Advisor in Adversarial Proceedings - Rule 1.8(l) addresses primarily administrative proceedings in which a lawyer who serves as an advisor to a public administrative body is permitted to prosecute matters which are adjudicated by that body. This rule prohibits a lawyer who has served or is serving as an advisor on a particular matter from also prosecuting or defending that particular matter. It does not prevent one lawyer from prosecuting an administrative matter in which another lawyer in the same office serves as an advisor to the hearing body, as long as the lawyers do not communicate with one another or share information about the particular case. Communications between the prosecuting lawyer and the advising lawyer with respect to a particular matter would operate as an indirect ex parte communication with the hearing officer, trial judge, or trier of fact, because the information gained by the advising lawyer would be available to the hearing officer, trial judge, or trier of fact.
For example, a lawyer advising the Board of Dentistry may not prosecute a disciplinary action against Dentist Doe while at the same time advising the Board on matters relative to the Doe matter. The lawyer may advise the Board on the Doe matter while another lawyer employed by the same employer prosecutes the Doe matter, but the two lawyers may not share information with one another, except in the regular course of discovery, with notice to Doe. The lawyers must operate as if they are in separate firms, even though they are employed by a common employer. Similarly, general counsel employed by a state supported university may not defend the university in a dispute brought by an employee under the university’s internal employee grievance system while at the same time serving as an advisor to the internal panel which is adjudicating the employee grievance matter. One lawyer in general counsel’s office may advise the employee grievance body on the particular matter while another lawyer in the same office defends the university in the matter, as long as the two lawyers do not share information concerning the matter. The lawyers must operate as if they are in separate firm
Francine Norz, Esquire
14thJudicial Circuit South Carolina-the statutes
Breach of Trust (BOT)
Embezzlement of Public Funds
Forgery
Fraud check
Larceny
Financial Identity Fraud
Financial Transaction card fraud
Obtaining Goods under False Pretenses
Financial Exploitation of a Vulnerable Adult
Receiving Stolen Goods
In simplest terms: You stole money or things
The method of stealing/the method of cover up of the stealing typically will determine the exact statute charged.
Breach of Trust vs. Larceny
Breach of Trust with Fraudulent Intent-S.C. Code 16-13-230 : This is what South Carolina calls embezzlement. (not to be confused with Embezzlement of Public funds-different Statute)
Why isn’t it just Larceny?
Larceny involves unlawfully obtaining possession of the property with intent to steal.
Breach of Trust-the defendant has lawful possession but fraudulently converts the property to defendant’s own use and benefit with intent to steal (deprive the owner of the property).
Trust/Fiduciary Relationship needed for Breach of Trust
In South Carolina the Elements of Breach of Trust are not in the Statute. You must look to at case law.
Employer/Employee is trust relationship
A Fiduciary Relationship (Escrow agent)
“The party reposing trust in another has some foundation for believing the one so entrusted will not act in his own behalf but in the interest of the party so reposing.” State v. Parris, 353 S.C. 582 (Ct. App. 2003).
Partners stealing from Partnership
The Confusion that still sometimes exists
The concept is that each partner owns 100% of a partnership (undivided interest) so a partner can’t steal from himself so one partner stealing from the partnership bank account to buy himself a new boat isn’t stealing. (See, Patterson v. Bogan, 261 S.C. 87 (1973))
Today’s reality-most partnerships are legal corporations (LLC or S Corps)-its own legal entity that can own property. The assets of the corp belong to the corp. not to the individual stockholders.
Embezzlement of Public Funds
S.C. Code 16-13-210
“It is unlawful for an officer or other person charged with the safekeeping, transfer, and disbursement of public funds to embezzle these funds.”
over $10,000= up to 10 years imprisonment
Under $10,000= up to 5 years imprisonment
Procedure in place for a Lien on public retirement or pension plan of persons convicted of embezzling public funds. (S.C. Code 8-1-115)
3rd or subsequent conviction of a property crime.
If the current property crime is under dollar threshold to reach the maximum penalty of up to 10 years of imprisonment –watch out!
The Prosecuting Attorney could ask for sentencing enhancement under S.C. Code 16-1-57.
This increases the penalty for even a misdemeanor property crime to a Class E Felony punishable up to 10 years.
Juvenile Defendants and Financial Crimes
S.C. Code Sec. 24-19-10
If your defendant is under age 17 at the time of Grand Jury Indictment
Youthful offender is defined as: (i) Under 17and bound over for a criminal proceeding to court of general sessions for allegedly committing an offense that is not a violent crime even if it is a Felony (punishable by 15 years or less)
Defendant is over age 17 but under age 25 at the time of the Conviction.
S.C. Code Sect. 24-19-10 further defines a Youthful Offender as:
(ii) 17 but less than 25 at the time of the conviction for a non-violent crime even if Felony (if punishable for max term of 15 years or less).
Why care about Youthful Offender Act (“YOA”)?
S.C. Code Sec. 22-5-920: First offense under the YOA the defendant after 5 years from the date of the completion of his sentence, including probation and parole, may apply for expungement.
So if the defendant has no other conviction during the 5 year period following the completion of his sentence he can apply to expunge the entire record including the arrest record.
No person may have his records expunged under this section more than once.
The sentence must be taken under the YOA or defendant not eligible for expungement.
If Eligible for YOA Judge Must Consider It.
If your defendant is eligible for sentencing under the Youthful Offender Act-then then the record must reflect that the Judge considered sentencing under the Youthful Offender Act.
UndocumentedDefendants
Defendants are subject to removal from the United States under the Immigration and Nationality Act (Sections 237(a)(2)(A)(iii)) If they are convicted of a theft offense (including receiving stolen property) or burglary offense for which the term of imprisonment at least one year was imposed.
Even sentences that are 1 year suspended to 1 year of probation count under the Act as a “term of imprisonment at least one year was imposed”.
Defense Attorneys Required to Inform
The 6th Amendment of U.S. Constitution requires Defense Attorneys to inform non-citizen clients of the deportation risks of guilty pleas.
So Put it on the Record that you informed your client.
S.C. Code 17-25-322(A) : In addition to any other sentence it may impose, the Court shall order the defendant make restitution or compensate the victim for ay pecuniary damages.
What the Court MAY consider in restitution amount ordered:
1. the financial resources of the defendant and the victim and the burden that the manner and method of restitution will impose upon the victim or defendant
2. the ability of the defendant to pay restitution on an installment basis or on other conditions to be fixed by the Court
3. the anticipated rehabilitative effect on the defendant regarding the manner of restitution or the method of payment
4. any burden or hardship on the victim as direct or indirect result of the defendant’s criminal acts
5. the mental, physical, and financial well-being of the victim
Restitution Hearing?
No hearing if the defendant in open Court agrees to the amount due. S.C. Code 17-25-322.
So if restitution is part of the Plea Agreement-can just agree to the dollar amount and no hearing. Restitution is part of Sentencing Order.
Probation Department collects restitution –Probation comes up with reasonable monthly amount based on income. –5 years is maximum period of time for probation. So if not paid at end of 5 years –automatically becomes a civil judgment.
Failure to pay Restitution-Consequences?
2014 Judge Mullen Decision Reversed:
State v. Tonya McAllister: A trial Court can imprison for failure to pay restitution ONLY when there is a willful failure to pay, and Court must make a finding of willfulness.–Can infer willfulness when defendant has ability to pay and does not do so.
The Court has to find that the defendant could not pay despite bona fide effort to acquire the resources to do so.
Restitution Hearing
May be as much work as criminal trial but evidentiary rules don’t apply.
A restitution hearing is governed by the same rules as a sentencing hearing; therefore, any evidence the court deems to have probative value may be received regardless of its admissibility under rules of evidence. State v. Gulledge,487 S.E. 2d 590 (S.C. 1997).
Defendants save money if they pay prior to plea.
If Probation Department has to collect the restitution then there is a 20% fee on top of restitution that goes to the Probation Department.
•
If Defendant pays the victim prior to sentencing the 20% fee is avoided.
Civil Settlement does not end Criminal Restitution
•
State v. Jason Randall Morgan, Opinion No. 5429 Court of Appeals South Carolina (Jan. 5, 2016):
•
Felony DUI-Car Insurance settles civil claim for limits of the policy $25,000 and has victim sign standard release (prior to criminal plea).
•
Then there is a criminal restitution hearing and the Judge orders restitution of $238,660 for outstanding medical bills.
Criminal restitution /Civil Restitution
•
Just as Civil restitution settlement does not bar a criminal restitution order–this goes both ways.
•
A criminal restitution order will not bar a civil remedy or recovery.
•
Victim can’t get paid 2x but can get paid more!
•
Civil settlement will be deducted from Criminal restitution owed.
So the victim was paid by their Insurance Policy-Now What?
•
Insurance company now stands in the shoes of the victim.
•
False to think that there is no restitution owed because the victim was lucky enough to have an insurance policy that covers employee theft.
•
S.C. Code 17-25-324: Insurance companies are secondary victims or third party payee–they get listed second on the restitution sheet.
Restitution the Reality.
•
Defendants do not keep accurate records while stealing.
Labor intensive to sort through bank statements-
$50,000 over or under?
•
No priors?
•
Cooperate?
•
Tax payor money?
Advise to your client----
PTI –Pre Trial Intervention
•
The Solicitor’s Office has to recommend.
•
Victim has input.
One year to complete –so can defendant pay all the restitution in one year?
NON-Violent Crimes
•
Expect to serve about 55%-60% of the incarceration sentence
WAKE UP! Could your law firm be a Victim?
•
You would be in good company: Example victims
The Schemes
•
Who controls Quickbooks? Just one employee? –
•
Put entry in Quickbooks for Verizon phone bill.
•
--Anyone else but one employee see the actual Verizon bill? (mom dad sister cousin and neighbor’s Verizon bills all being paid)-yet one entry for Verizon
•
Car Dealer –check payee changed to 9 different credit card companies –yet in QuickBooks checks looks like payable to car part vendors
•
Double signing checks-not enough –money comes out through debit card, electronic checks, credit cards.
False Invoices-Bills for Landscaping –but never saw Joe’s Landscaping trucks.
Schemes
•
Go back in time and do refunds –so end of day report evens out then take the cash.
•
--Hampton Turf farm case $1.2 Million –(caught –by bank employee who says why check payable to buy equipment for another business?)
•
--Water company case-$118,000 (Jasper County)
•
--Jasper County Car Dealer -$1.9 million (manager fired for poor profits)
--Heritage Golf Group case –about $500,000 –just post a credit of some type to customer account so customer bill looks paid-then can pocket the cash from daily collections.
--Heirs property case-Attorney Defendant: signing deed for property over to himself. Then sell the property and spend the money. ($1.3 million)
More Schemes
•
(Jasper Case) New River Auto Mall victim. Amount of restitution $133,064.27. -2 years active incarceration per Judge non-negotiated plea
•
Scheme: Car purchasing customers are due a refund when they overpay for tags and registration fees. Just an estimate. So checks are cut each month to the customer-but defendant would go to ATM and deposit the checks into her own account. Bank accepts the checks.
•
Drug store-frequent customer points-unclaimed points-cashier uses them.
Credit Card Machines:
•
Basically are open checkbooks –can do refunds.
•
Some more sophisticated and have to credit a card that it recognizes.
•
Restaurants-voiding checks or comping meals
•
Any adjustment to a customer invoice/ bill-why–hotel with refunds done 6 months after the guest left the hotel.
How Caught?
•
The employee who never takes a vacation ( territorial) –red flag
•
High expenses–why are we not making more profit? Expenses too high.
•
Lower cash collections.
•
Customers complain bill should show paid.
•
High refund rate (hotel, restaurants, golf course).
REVIEW CREDIT CARD/Debit card bills
•
Paper Bank Statements and look at the Checks.
Divide up the Duties
•
One person pays the bills and a different person reconciles the bank statement.
Background check your employees
•
SLED offers background checks for $25 (but only shows arrests in South Carolina)
•
For $35 you can go to any of the internet sites (Goodhire)
•
For free you can go to Bcgov.net --Departments-Clerk of Court –Case Records search-Public Index –look up a person’s name and see criminal, civil, traffic arrests
Outback restaurant case-hired woman I had put in Jail 2x. Now in jail for 3rdtime. -Supposedly corporate Outback did a background check?
Pep-woman started work and 3 days later background check results come back-she is fired. But in those 3 days she stole checks out of the mail payable to PEP. She deposited those checks to her own bank account.
You represent a Business who has had Theft
Do you need a forensic Accountant?
How long did employee work there? –Look back to day one of employment
Can get 7 years of bank statements.
Report fraud to bank and credit card companies-some only 30 days from date you received statement to complain.
Insurance? Often it is there and will pay. Some plans only pay if prosecute and win-terrible insurance.
DID I JUST WASTE TIME AT CLE?
•
10% Rule
•
The therapeutic value of seeing you are not alone in your misery
Breach of Trust (BOT)
Embezzlement of Public Funds
Forgery
Fraud check
Larceny
Financial Identity Fraud
Financial Transaction card fraud
Obtaining Goods under False Pretenses
Financial Exploitation of a Vulnerable Adult
Receiving Stolen Goods
In simplest terms: You stole money or things
The method of stealing/the method of cover up of the stealing typically will determine the exact statute charged.
Breach of Trust vs. Larceny
Breach of Trust with Fraudulent Intent-S.C. Code 16-13-230 : This is what South Carolina calls embezzlement. (not to be confused with Embezzlement of Public funds-different Statute)
Why isn’t it just Larceny?
Larceny involves unlawfully obtaining possession of the property with intent to steal.
Breach of Trust-the defendant has lawful possession but fraudulently converts the property to defendant’s own use and benefit with intent to steal (deprive the owner of the property).
Trust/Fiduciary Relationship needed for Breach of Trust
In South Carolina the Elements of Breach of Trust are not in the Statute. You must look to at case law.
Employer/Employee is trust relationship
A Fiduciary Relationship (Escrow agent)
“The party reposing trust in another has some foundation for believing the one so entrusted will not act in his own behalf but in the interest of the party so reposing.” State v. Parris, 353 S.C. 582 (Ct. App. 2003).
Partners stealing from Partnership
The Confusion that still sometimes exists
The concept is that each partner owns 100% of a partnership (undivided interest) so a partner can’t steal from himself so one partner stealing from the partnership bank account to buy himself a new boat isn’t stealing. (See, Patterson v. Bogan, 261 S.C. 87 (1973))
Today’s reality-most partnerships are legal corporations (LLC or S Corps)-its own legal entity that can own property. The assets of the corp belong to the corp. not to the individual stockholders.
Embezzlement of Public Funds
S.C. Code 16-13-210
“It is unlawful for an officer or other person charged with the safekeeping, transfer, and disbursement of public funds to embezzle these funds.”
over $10,000= up to 10 years imprisonment
Under $10,000= up to 5 years imprisonment
Procedure in place for a Lien on public retirement or pension plan of persons convicted of embezzling public funds. (S.C. Code 8-1-115)
3rd or subsequent conviction of a property crime.
If the current property crime is under dollar threshold to reach the maximum penalty of up to 10 years of imprisonment –watch out!
The Prosecuting Attorney could ask for sentencing enhancement under S.C. Code 16-1-57.
This increases the penalty for even a misdemeanor property crime to a Class E Felony punishable up to 10 years.
Juvenile Defendants and Financial Crimes
S.C. Code Sec. 24-19-10
If your defendant is under age 17 at the time of Grand Jury Indictment
Youthful offender is defined as: (i) Under 17and bound over for a criminal proceeding to court of general sessions for allegedly committing an offense that is not a violent crime even if it is a Felony (punishable by 15 years or less)
Defendant is over age 17 but under age 25 at the time of the Conviction.
S.C. Code Sect. 24-19-10 further defines a Youthful Offender as:
(ii) 17 but less than 25 at the time of the conviction for a non-violent crime even if Felony (if punishable for max term of 15 years or less).
Why care about Youthful Offender Act (“YOA”)?
S.C. Code Sec. 22-5-920: First offense under the YOA the defendant after 5 years from the date of the completion of his sentence, including probation and parole, may apply for expungement.
So if the defendant has no other conviction during the 5 year period following the completion of his sentence he can apply to expunge the entire record including the arrest record.
No person may have his records expunged under this section more than once.
The sentence must be taken under the YOA or defendant not eligible for expungement.
If Eligible for YOA Judge Must Consider It.
If your defendant is eligible for sentencing under the Youthful Offender Act-then then the record must reflect that the Judge considered sentencing under the Youthful Offender Act.
UndocumentedDefendants
Defendants are subject to removal from the United States under the Immigration and Nationality Act (Sections 237(a)(2)(A)(iii)) If they are convicted of a theft offense (including receiving stolen property) or burglary offense for which the term of imprisonment at least one year was imposed.
Even sentences that are 1 year suspended to 1 year of probation count under the Act as a “term of imprisonment at least one year was imposed”.
Defense Attorneys Required to Inform
The 6th Amendment of U.S. Constitution requires Defense Attorneys to inform non-citizen clients of the deportation risks of guilty pleas.
So Put it on the Record that you informed your client.
S.C. Code 17-25-322(A) : In addition to any other sentence it may impose, the Court shall order the defendant make restitution or compensate the victim for ay pecuniary damages.
What the Court MAY consider in restitution amount ordered:
1. the financial resources of the defendant and the victim and the burden that the manner and method of restitution will impose upon the victim or defendant
2. the ability of the defendant to pay restitution on an installment basis or on other conditions to be fixed by the Court
3. the anticipated rehabilitative effect on the defendant regarding the manner of restitution or the method of payment
4. any burden or hardship on the victim as direct or indirect result of the defendant’s criminal acts
5. the mental, physical, and financial well-being of the victim
Restitution Hearing?
No hearing if the defendant in open Court agrees to the amount due. S.C. Code 17-25-322.
So if restitution is part of the Plea Agreement-can just agree to the dollar amount and no hearing. Restitution is part of Sentencing Order.
Probation Department collects restitution –Probation comes up with reasonable monthly amount based on income. –5 years is maximum period of time for probation. So if not paid at end of 5 years –automatically becomes a civil judgment.
Failure to pay Restitution-Consequences?
2014 Judge Mullen Decision Reversed:
State v. Tonya McAllister: A trial Court can imprison for failure to pay restitution ONLY when there is a willful failure to pay, and Court must make a finding of willfulness.–Can infer willfulness when defendant has ability to pay and does not do so.
The Court has to find that the defendant could not pay despite bona fide effort to acquire the resources to do so.
Restitution Hearing
May be as much work as criminal trial but evidentiary rules don’t apply.
A restitution hearing is governed by the same rules as a sentencing hearing; therefore, any evidence the court deems to have probative value may be received regardless of its admissibility under rules of evidence. State v. Gulledge,487 S.E. 2d 590 (S.C. 1997).
Defendants save money if they pay prior to plea.
If Probation Department has to collect the restitution then there is a 20% fee on top of restitution that goes to the Probation Department.
•
If Defendant pays the victim prior to sentencing the 20% fee is avoided.
Civil Settlement does not end Criminal Restitution
•
State v. Jason Randall Morgan, Opinion No. 5429 Court of Appeals South Carolina (Jan. 5, 2016):
•
Felony DUI-Car Insurance settles civil claim for limits of the policy $25,000 and has victim sign standard release (prior to criminal plea).
•
Then there is a criminal restitution hearing and the Judge orders restitution of $238,660 for outstanding medical bills.
Criminal restitution /Civil Restitution
•
Just as Civil restitution settlement does not bar a criminal restitution order–this goes both ways.
•
A criminal restitution order will not bar a civil remedy or recovery.
•
Victim can’t get paid 2x but can get paid more!
•
Civil settlement will be deducted from Criminal restitution owed.
So the victim was paid by their Insurance Policy-Now What?
•
Insurance company now stands in the shoes of the victim.
•
False to think that there is no restitution owed because the victim was lucky enough to have an insurance policy that covers employee theft.
•
S.C. Code 17-25-324: Insurance companies are secondary victims or third party payee–they get listed second on the restitution sheet.
Restitution the Reality.
•
Defendants do not keep accurate records while stealing.
Labor intensive to sort through bank statements-
$50,000 over or under?
•
No priors?
•
Cooperate?
•
Tax payor money?
Advise to your client----
PTI –Pre Trial Intervention
•
The Solicitor’s Office has to recommend.
•
Victim has input.
One year to complete –so can defendant pay all the restitution in one year?
NON-Violent Crimes
•
Expect to serve about 55%-60% of the incarceration sentence
WAKE UP! Could your law firm be a Victim?
•
You would be in good company: Example victims
The Schemes
•
Who controls Quickbooks? Just one employee? –
•
Put entry in Quickbooks for Verizon phone bill.
•
--Anyone else but one employee see the actual Verizon bill? (mom dad sister cousin and neighbor’s Verizon bills all being paid)-yet one entry for Verizon
•
Car Dealer –check payee changed to 9 different credit card companies –yet in QuickBooks checks looks like payable to car part vendors
•
Double signing checks-not enough –money comes out through debit card, electronic checks, credit cards.
False Invoices-Bills for Landscaping –but never saw Joe’s Landscaping trucks.
Schemes
•
Go back in time and do refunds –so end of day report evens out then take the cash.
•
--Hampton Turf farm case $1.2 Million –(caught –by bank employee who says why check payable to buy equipment for another business?)
•
--Water company case-$118,000 (Jasper County)
•
--Jasper County Car Dealer -$1.9 million (manager fired for poor profits)
--Heritage Golf Group case –about $500,000 –just post a credit of some type to customer account so customer bill looks paid-then can pocket the cash from daily collections.
--Heirs property case-Attorney Defendant: signing deed for property over to himself. Then sell the property and spend the money. ($1.3 million)
More Schemes
•
(Jasper Case) New River Auto Mall victim. Amount of restitution $133,064.27. -2 years active incarceration per Judge non-negotiated plea
•
Scheme: Car purchasing customers are due a refund when they overpay for tags and registration fees. Just an estimate. So checks are cut each month to the customer-but defendant would go to ATM and deposit the checks into her own account. Bank accepts the checks.
•
Drug store-frequent customer points-unclaimed points-cashier uses them.
Credit Card Machines:
•
Basically are open checkbooks –can do refunds.
•
Some more sophisticated and have to credit a card that it recognizes.
•
Restaurants-voiding checks or comping meals
•
Any adjustment to a customer invoice/ bill-why–hotel with refunds done 6 months after the guest left the hotel.
How Caught?
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The employee who never takes a vacation ( territorial) –red flag
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High expenses–why are we not making more profit? Expenses too high.
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Lower cash collections.
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Customers complain bill should show paid.
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High refund rate (hotel, restaurants, golf course).
REVIEW CREDIT CARD/Debit card bills
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Paper Bank Statements and look at the Checks.
Divide up the Duties
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One person pays the bills and a different person reconciles the bank statement.
Background check your employees
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SLED offers background checks for $25 (but only shows arrests in South Carolina)
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For $35 you can go to any of the internet sites (Goodhire)
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For free you can go to Bcgov.net --Departments-Clerk of Court –Case Records search-Public Index –look up a person’s name and see criminal, civil, traffic arrests
Outback restaurant case-hired woman I had put in Jail 2x. Now in jail for 3rdtime. -Supposedly corporate Outback did a background check?
Pep-woman started work and 3 days later background check results come back-she is fired. But in those 3 days she stole checks out of the mail payable to PEP. She deposited those checks to her own bank account.
You represent a Business who has had Theft
Do you need a forensic Accountant?
How long did employee work there? –Look back to day one of employment
Can get 7 years of bank statements.
Report fraud to bank and credit card companies-some only 30 days from date you received statement to complain.
Insurance? Often it is there and will pay. Some plans only pay if prosecute and win-terrible insurance.
DID I JUST WASTE TIME AT CLE?
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10% Rule
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The therapeutic value of seeing you are not alone in your misery
The Honorable Deborah Malphrus, Family Court Judge
ISSUES AND LAWS RELATED TO SURROGACY
Agenda
1. Brief Overview of Assisted Reproductive Technology
a. Definition
b. Legal Definition in South Carolina?
c. Different types of Assisted Reproductive Technology:
2. Surrogacy
a. Definition
b. Different Types of Surrogacy
c. South Carolina laws related to surrogacy?
SC Statutory laws??
SC Case law related to surrogacy?
d. Laws from other jurisdictions related to surrogacy.
3. International Surrogacy
a. When non-US citizens create a US citizen through surrogacy.
b. Special concerns. Should we care about the political, social, cultural, economic conditions of the country this US citizen will be raised in? If these are valid concerns, is there anything we can do about it?
c. Should international surrogacy be banned?
4. Topics for discussion and debate in Surrogacy
a. Is the best interest of the child relevant
b. How do you legally define a parent/mother/father
c. Who has legally recognized parental rights?
d. “Selective reduction”—abortion?
e. Illegal baby-selling?
f. Contract rights?
g. Parental rights?
h. Birth Mother vs. biological mother
i. Father? Husband of birth mother? Husband of biological mother? The sperm donor? What man, if any, has parental rights?
j. “Designer babies”
Purchasing eggs, sperm, embryos to produce the desired baby
Genetically altering DNA to produce the desired baby
k. Should we be concerned about the person(s) receiving a baby through surrogacy? If so, is there anything we can do about it?
l. Is there a constitutionally protected right to become a parent through surrogacy? Can we restrict who can become a parent through surrogacy? (I don’t think we can tell a woman she cannot naturally conceive a child with a pedophile. Should we be able to legally tell a woman she cannot be a surrogate for a pedophile?)
5. Ethical concerns in surrogacy
Legal
Medical
Religious
6. A case-study of an International Surrogacy---spotting the issues--
7. Should the South Carolina General Assembly pass legislation regulating surrogacy? If so, what would you propose this legislation look like
Agenda
1. Brief Overview of Assisted Reproductive Technology
a. Definition
b. Legal Definition in South Carolina?
c. Different types of Assisted Reproductive Technology:
2. Surrogacy
a. Definition
b. Different Types of Surrogacy
c. South Carolina laws related to surrogacy?
SC Statutory laws??
SC Case law related to surrogacy?
d. Laws from other jurisdictions related to surrogacy.
3. International Surrogacy
a. When non-US citizens create a US citizen through surrogacy.
b. Special concerns. Should we care about the political, social, cultural, economic conditions of the country this US citizen will be raised in? If these are valid concerns, is there anything we can do about it?
c. Should international surrogacy be banned?
4. Topics for discussion and debate in Surrogacy
a. Is the best interest of the child relevant
b. How do you legally define a parent/mother/father
c. Who has legally recognized parental rights?
d. “Selective reduction”—abortion?
e. Illegal baby-selling?
f. Contract rights?
g. Parental rights?
h. Birth Mother vs. biological mother
i. Father? Husband of birth mother? Husband of biological mother? The sperm donor? What man, if any, has parental rights?
j. “Designer babies”
Purchasing eggs, sperm, embryos to produce the desired baby
Genetically altering DNA to produce the desired baby
k. Should we be concerned about the person(s) receiving a baby through surrogacy? If so, is there anything we can do about it?
l. Is there a constitutionally protected right to become a parent through surrogacy? Can we restrict who can become a parent through surrogacy? (I don’t think we can tell a woman she cannot naturally conceive a child with a pedophile. Should we be able to legally tell a woman she cannot be a surrogate for a pedophile?)
5. Ethical concerns in surrogacy
Legal
Medical
Religious
6. A case-study of an International Surrogacy---spotting the issues--
7. Should the South Carolina General Assembly pass legislation regulating surrogacy? If so, what would you propose this legislation look like
Senator Thomas C. Davis
Marijuana as an alternative to opioids for the treatment of pain
The opioid problem
National Centers for Health Statistics: 76 million Americans suffer from chronic pain, more than diabetes, heart disease and cancer, combined.
Primary treatment for chronic pain involves the prescription of opiate-based therapies which has resulted in 259 million annual prescriptions, enough to give every American adult their own bottle of pills.
U.S. in 2015: all-time high of 52,000 overdose deaths, two-thirds of which were opioid-related.
S.C.: In 2016, 550 deaths from opioid overdoses, up 7% from 2015 and 18% from 2014.
The CDC says that every day 91 individuals lose their lives to prescription opioid-related causes.
Americans are only 4.2% of the planet's population; they use 80% of the world’s opioid supply.
The medical science
The National Academy of Sciences in January 2017 published “The Health Effects of Cannabis and Cannabinoids” after reviewing more than 10,000 studies, finding that “in adults with chronic pain, patients who were treated with cannabis or cannabinoids are more likely to experience a clinically significant reduction in pain symptoms.
This report also included that “there is substantial evidence that cannabis is an effective treatment for chronic pain in adults.”
Marijuana contains 60 active ingredients known as cannabinoids. The body naturally makes its own form of cannabinoids to modulate pain. Two cannabinoid receptors (CB1 and CB2) are present in the brain as part of the human body's natural pain control system. THC binds to the receptors that are involved in mediating pain; it works directly on pain pathways in the brain. It addresses the causes of pain; opioids address the symptoms.
Cannabis is not a cure-all for every medical condition, nor would it be appropriate for every patient. But it should be added to a physician’s inventory of treatment choices.
The evidence of decreased opioid use
University of Michigan study in 2016: MMJ results in 64% reduction in the use of opioids.
JAMA study published in 2014, surveying results over an 11-year period, found opioid overdose deaths 25% lower in MMJ states. That equates to 138 saved lives in SC alone.
Univ. of Georgia in 2016 found that in MMJ states each physician prescribed an average of 1,826 fewer doses of opioids each year.
The Public Library of Science study published in 2017, studying New Mexico MMJ patients from April 2010 through October 2015, found a 47% reduction in opioid use.
The National Institute on Drug Abuse funded a study by the RAND Corporation, published in May 2016, which found a 16% to 31% decline in mortality due to opioid overdoses and a 28% to 35% decline in admissions for treatment of opioid addiction.
“Parade of Horribles” rebutted
Gateway drug: In August 2016, the DEA formally admitted in a report that there is no scientific evidence to support that cannabis is a gateway drug: “Overall, research does not support a direct causal relationship between regular cannabis use and other illicit drug use.”
Opioids are the real gateway drug: the National Institute on Drug Abuse, pooling data from 2002 to 2012, found heroin use 19 times higher among those who had previously used of opioids, and that 86% of heroin users had used opioid pain relievers prior to using heroin.
Black market cannabis is frequently laced with more addictive drugs in order to create new addicts. Medical cannabis is highly controlled.
Cannabis can facilitate the decreased usage of opioids, making it an exit drug for some addicts.
On the claim that marijuana is addictive: Nat’l Institute on Drug Abuse says 9% of marijuana users became addicted as opposed to about 12% of alcohol users and 30% of tobacco users.
The five leading drug types that cause death are tobacco, alcohol, prescription opioids, heroin, and cocaine. No one has ever died from taking too high a dose of THC.
Status of cannabis legalization
31 states plus DC have medical-cannabis laws. 11 states, including SC, have legalized CBD oil.
The so-called “Cole Memorandum” – a memorandum issued on by Deputy Attorney General James M. Cole to all United States Attorneys on August 29, 2013 – advises that the DOJ is deferring its rights to challenge the legality of states’ cannabis-legalization laws.
Since 2014, federal budgets have included amendments that block the DOJ from using federal tax dollars to go after states that have legalized marijuana.
What the people want
Nationally: A Quinnipiac poll in April 2016 found 89% of Americans support allowing adults to legally use marijuana for medical purposes – 81% of Republicans, 94% of Democrats, and 93% of Independents. 73% oppose fed enforcement marijuana laws in MMJ states.
In SC: A September 2016 poll by Winthrop University found 78% of residents support legalizing medical marijuana – but that only 39% supported legalizing it for recreational use.
On November 2, 2017, the American Legion published a survey of over 800 veterans and veteran caregivers in which 82% said they wanted cannabis as a federally legal treatment option.
The federal ban is illogical
For 5 millennia, cannabis sativa has been used throughout the world medically and recreationally. And American physicians routinely prescribed it – until the feds banned it in 1970 for political reasons. The AMA protested its ban, as did President Nixon’s own commission.
The FDA is intended to control new medicines, not medicines that had already been in use for hundreds or thousands of years. It looks foolish defending the classification of cannabis as a Schedule I drug as having “no accepted medical use” – as foolish as insisting the earth is flat.
FDA studies are sponsored by pharmaceutical companies that stand to make billions on new sales. But those companies will get little revenue from sale of cannabis.
In order to reschedule cannabis, the FDA needs to coordinate with DEA, National Institute of Drug Abuse, the Department of Justice, and other agencies, which are vulnerable to political pressures, not just scientific findings.
The DEA has also refused to grant licenses to allow legal marijuana imports for medical research – then says there is insufficient research to reschedule. This is circular reasoning.
The opioid problem
National Centers for Health Statistics: 76 million Americans suffer from chronic pain, more than diabetes, heart disease and cancer, combined.
Primary treatment for chronic pain involves the prescription of opiate-based therapies which has resulted in 259 million annual prescriptions, enough to give every American adult their own bottle of pills.
U.S. in 2015: all-time high of 52,000 overdose deaths, two-thirds of which were opioid-related.
S.C.: In 2016, 550 deaths from opioid overdoses, up 7% from 2015 and 18% from 2014.
The CDC says that every day 91 individuals lose their lives to prescription opioid-related causes.
Americans are only 4.2% of the planet's population; they use 80% of the world’s opioid supply.
The medical science
The National Academy of Sciences in January 2017 published “The Health Effects of Cannabis and Cannabinoids” after reviewing more than 10,000 studies, finding that “in adults with chronic pain, patients who were treated with cannabis or cannabinoids are more likely to experience a clinically significant reduction in pain symptoms.
This report also included that “there is substantial evidence that cannabis is an effective treatment for chronic pain in adults.”
Marijuana contains 60 active ingredients known as cannabinoids. The body naturally makes its own form of cannabinoids to modulate pain. Two cannabinoid receptors (CB1 and CB2) are present in the brain as part of the human body's natural pain control system. THC binds to the receptors that are involved in mediating pain; it works directly on pain pathways in the brain. It addresses the causes of pain; opioids address the symptoms.
Cannabis is not a cure-all for every medical condition, nor would it be appropriate for every patient. But it should be added to a physician’s inventory of treatment choices.
The evidence of decreased opioid use
University of Michigan study in 2016: MMJ results in 64% reduction in the use of opioids.
JAMA study published in 2014, surveying results over an 11-year period, found opioid overdose deaths 25% lower in MMJ states. That equates to 138 saved lives in SC alone.
Univ. of Georgia in 2016 found that in MMJ states each physician prescribed an average of 1,826 fewer doses of opioids each year.
The Public Library of Science study published in 2017, studying New Mexico MMJ patients from April 2010 through October 2015, found a 47% reduction in opioid use.
The National Institute on Drug Abuse funded a study by the RAND Corporation, published in May 2016, which found a 16% to 31% decline in mortality due to opioid overdoses and a 28% to 35% decline in admissions for treatment of opioid addiction.
“Parade of Horribles” rebutted
Gateway drug: In August 2016, the DEA formally admitted in a report that there is no scientific evidence to support that cannabis is a gateway drug: “Overall, research does not support a direct causal relationship between regular cannabis use and other illicit drug use.”
Opioids are the real gateway drug: the National Institute on Drug Abuse, pooling data from 2002 to 2012, found heroin use 19 times higher among those who had previously used of opioids, and that 86% of heroin users had used opioid pain relievers prior to using heroin.
Black market cannabis is frequently laced with more addictive drugs in order to create new addicts. Medical cannabis is highly controlled.
Cannabis can facilitate the decreased usage of opioids, making it an exit drug for some addicts.
On the claim that marijuana is addictive: Nat’l Institute on Drug Abuse says 9% of marijuana users became addicted as opposed to about 12% of alcohol users and 30% of tobacco users.
The five leading drug types that cause death are tobacco, alcohol, prescription opioids, heroin, and cocaine. No one has ever died from taking too high a dose of THC.
Status of cannabis legalization
31 states plus DC have medical-cannabis laws. 11 states, including SC, have legalized CBD oil.
The so-called “Cole Memorandum” – a memorandum issued on by Deputy Attorney General James M. Cole to all United States Attorneys on August 29, 2013 – advises that the DOJ is deferring its rights to challenge the legality of states’ cannabis-legalization laws.
Since 2014, federal budgets have included amendments that block the DOJ from using federal tax dollars to go after states that have legalized marijuana.
What the people want
Nationally: A Quinnipiac poll in April 2016 found 89% of Americans support allowing adults to legally use marijuana for medical purposes – 81% of Republicans, 94% of Democrats, and 93% of Independents. 73% oppose fed enforcement marijuana laws in MMJ states.
In SC: A September 2016 poll by Winthrop University found 78% of residents support legalizing medical marijuana – but that only 39% supported legalizing it for recreational use.
On November 2, 2017, the American Legion published a survey of over 800 veterans and veteran caregivers in which 82% said they wanted cannabis as a federally legal treatment option.
The federal ban is illogical
For 5 millennia, cannabis sativa has been used throughout the world medically and recreationally. And American physicians routinely prescribed it – until the feds banned it in 1970 for political reasons. The AMA protested its ban, as did President Nixon’s own commission.
The FDA is intended to control new medicines, not medicines that had already been in use for hundreds or thousands of years. It looks foolish defending the classification of cannabis as a Schedule I drug as having “no accepted medical use” – as foolish as insisting the earth is flat.
FDA studies are sponsored by pharmaceutical companies that stand to make billions on new sales. But those companies will get little revenue from sale of cannabis.
In order to reschedule cannabis, the FDA needs to coordinate with DEA, National Institute of Drug Abuse, the Department of Justice, and other agencies, which are vulnerable to political pressures, not just scientific findings.
The DEA has also refused to grant licenses to allow legal marijuana imports for medical research – then says there is insufficient research to reschedule. This is circular reasoning.
