Texas Contract Interpretation

The most basic principal of contract interpretation is that a contract is interpreted objectively and not subjectively. This idea originated at Harvard Law School, but still holds true in Texas today.

The formal view of contract interpretation ignores what the contracting parties thought the bargain to be and instead asks what a reasonable third party would interpret the words of the contract to mean. This approach is reflected in the following quotation from Federal District Judge Learned Hand:

A contract has, strictly speaking, nothing to do with the personal or individual intent of the parties. A contract is an obligation attached by the mere force of law to certain act of the parties, usually words, which ordinarily accompany and represent a known intent.

A contract requires a meeting of the minds. A determination of whether there was a meeting of the minds is based on objective standards of what the parties said and did, not on their alleged subjective states of mind. In re Hudgins, 188 BR. 938, 942 (E.D. Tex. Bankr. 1995), cited in Spectrum Creations L.P. v. Carolyn Kinder Int’l LLC, 2008 WL 416246, *45 (W.D. Tex. 2008).

An integrated agreement may be either fully integrated or only partially integrated. A fully integrated contracted is a final and complete expression of all terms agreed upon between or among the parties. A partially integrated contract is a final and complete expression of the terms regarding an agreement, but not a final and complete expression of all terms agreed upon between the parties. Some of the terms agreed upon are not contained in the written agreement.

Under the Parole Evidence Rule, if the parties have integrated their agreement into a single written contract, all prior negotiations and agreements with regard to the same subject matter are excluded from consideration, whether written or oral. Parole evidence is admissible to supplement or explain a partially integrated contract, but is not admissible to contradict it.

The primary duty of a court when considering the validity of a contract is to ascertain the intent of the parties from the contract as a whole, known as the “four corners rule,” not from isolated parts of the contract. This rule requires the court to look at the words of the contract, not prior drafts or exchanges of letters or other documents or testimony to determine the intent of the parties. To achieve this goal, the court must examine the entire document and consider each part with every other part so that the effect and meaning of one part on any other part may be determined. No one phrase, sentence or section of a contract should be isolated and considered apart from the other provisions.

Terms of a contract are given their plain, ordinary and general meaning unless the instrument shows that the parties used them in a technical or different sense. Words should be taken in their immediate context.

The expression of one thing is the exclusion of another. This is used to control, limit or restrain the otherwise implied effect of an instrument, and not to annex incidents to written contracts in matters with respect to which they are silent.

When words of a general nature are used in connection with the designation of particular objects or classes of persons or things, the meaning of the general words will be restricted to the particular designation. In some cases a list of consistent terms will include an overly-broad term that seems to reach beyond the scope of the other things listed. Ejusdem generis will limit an overly-broad term to be consistent with the list. However, the doctrine is not limited to lists. It can also apply to sentences in a paragraph.

When a contract is unambiguous, the court should apply the pertinent rules of construction, apply the plain meaning of the contract language, and enforce the contract as written.

It is a generally accepted rule of contracts that where several contracts are executed contemporaneously or at different times and pertain to the same transaction, they will be read together although they do not expressly refer to each other.

There are other general rules such as: Specific terms will prevail over general terms. Earlier terms will prevail over later terms, except in the instance of a Will. Handwritten terms will prevail over typed terms and typed terms will prevail over preprinted terms. Words prevail over number or symbols. Courts are required to follow elemental rules of grammar for a reasonable application of the legal rules of construction.

It is also a rule universally recognized that if an instrument admits of two constructions, one of which would make it valid and the other invalid, the former must prevail.

There is a presumption against illegality. When a contract by its terms, construed as a whole, is doubtful, or even susceptible of more than one reasonable construction, a court will adopt the construction which comports with legality. It is presumed that in constructing contracts the parties intend to observe and obey the law.

Finally, when agreements between parties are reduced to writing, the written instrument is presumed to embody their entire agreement, and the court should not read into the instrument additional provisions unless this is necessary to effectuate the intention of the parties as disclosed by the contract as a whole. Danciger Oil & Ref. Co. v. Powell, 154 S.W.2d 632, 635 (Tex. 1941).

Mental Illness and the Child Custody Case

According to the National Institute of Mental Health, an estimated 26.2 percent of Americans age 18 and older – about one in four adults – suffer from a diagnosable mental disorder in a given year. This figure translates to 57.7 million people. Many people suffer from more than one mental disorder at a given time. Nearly half (45 percent) of those with mental disorder meet criteria for two or more disorders, with severity strongly related to co-morbidity. Mental illnesses are biologically based brain disorders. A diagnosed mental illness in a custody case may not only affect the eventual outcome of the case, but may also determine how counsel prepares his or her particular case strategy.

There are degrees of severity and levels of functioning with all mental disorders, and in the context of a contested custody case an extreme position can be easier for an attorney to handle. The fact finder is evaluating each parent’s ability to meet the child’s needs and the parties’ particular parenting abilities. A psychiatric diagnosis is not in and of itself a measuring tool. The specific acts of each parent must be examined in detail.

One important factor to consider is a request for psychological testing or the appointment of a counselor or psychiatrist to evaluate the parties. If the party with the mental illness has not admitted they have an illness, the results of court-ordered evaluations may force the issue and may also provide additional evidence to support a modification of temporary orders.

Counsel may want to recommend to the court that the child attend therapy. You may suggest the use of the therapist, psychiatrist, or psychologist of the person with the mental disorder for recommendations to the court of the parent’s visitation with the child.

Counsel may also want to consider a temporary injunction in addition to the standard temporary injunction for the preservation of property and protection of the parties and the children. Some issues to consider are preventing the use of alcohol within 24 hours of possession of the children; preventing the mentally ill party from operating a motor vehicle while taking medications, and preventing the parties from making disparaging remarks regarding the other party.

It is important that counsel identify and define the particular drugs the mentally ill patient is taking. Counsel should request a HIPPA Release (specifically related to mental health disclosures) allowing access to medical and prescription drug records of the mentally ill party. Research should then be performed as to the effects of each drug on the mentally ill person.

It may be necessary to have an Amicus Attorney appointed to represent the interests of the children. The Amicus Attorney has a powerful role in the contested custody case and can assist in gaining information on the mentally ill party. All parties should cooperate fully with the Amicus Attorney for the best interest of the children. It is important to make yourself available to the Amicus Attorney and to be pro-active in setting up appointments. It is important that counsel instruct you as to what to say and what not to say to the Amicus Attorney. It is also critical that counsel respond to any discovery propounded by an Amicus Attorney timely.

Be sure to educate yourself about the particular mental disorder you are dealing with. Make sure your experts have experience in handling the particular mental disorder in questions. Counsel should use the testimony of experts to offer aid and/or educate the judge and/or jury so they have a clear understanding of the mental illness and its foreseeable consequences to the spouse and/or family members.

The Whistleblower - Part IV - Qui Tam Claims

As reported in a front page story of today's Washington Times in September of 2009, internationally respected whistleblower, Bunnatine Greenhouse, has issued an appeal to the U.S. Senate to pass strong protections for all federal employees. Mrs. Greenhouse was the only major Bush Administration executive to challenge the Halliburton "no bid" Iraq reconstruction contracts. Ms. Greenhouse wrote a letter to Congress. "We urge every American to read Bunny's letter and to TAKE ACTION!," said Stephen M. Kohn, NWC Executive Director. "This is not a Democrat or Republican issue. This is not a partisan issue. This is an issue that goes to the heart of accountability and oversight.

It is estimated that almost 10% of the U.S. annual budget is paid to persons and/or companies defrauding the government. Some overcharge the government for products sold directly to the government, while others engage in government contract fraud, defense contractor fraud, Medicare fraud, Medicaid fraud, or other public benefit fraud. Any situation in which the government has been defrauded should be closely examined. To minimize fraud committed against the government, Congress passed the False Claims Act.

According to an annual report issued by the Department of Justice, approximately $1.2 billion was recovered in whistle blower claims and lawsuits filed by private citizens through their lawyers in the fiscal year October 1, 2000 to September 20, 2001, with more than $210 million of those funds being awarded to whistleblowers themselves. The amount is continuing to grow. It is estimated that $3.1 billions was collected from businesses defrauding the government in the year 2005.

The False Claims Act was Amended and strengthened in 1986. The amendments broaden the definition of fraud to include submitting claims with deliberate ignorance or reckless disregard for the truth of statements made in the claim for U.S. Government spending or funds upon which the fraud claim is based. The burden of proof that must be met by the qui tam attorney is a preponderance of the evidence, that is that the evidence presented is more likely true than not. The 1986 amendments included provisions to protect the federal whistleblower from retaliatory action by their employer.

A person who has knowledge of fraud against the government may retain a lawyer and file a court case under seal against the company or person committing the fraud. Following the filing of a lawsuit, the United States attorney has sixty days to investigate the allegations. The U.S. Government intervenes in approximately 25% to 33% of all whistleblower cases. If the U.S. attorney finds that fraud was committed, then the U.S. Government takes control of the case and either enters into a settlement or pursues the lawsuit itself.

If the government fails to intervene, the private citizen may pursue the action independently. If the lawyers are successful in proving fraud against the government, substantial penalties can be assessed, which can be up to 3 times the amount the defrauder stole from the government (the tax payers). Out of damages imposed the whistleblower may receive between 10% and 30% of the recovery, in some cases recovery could be millions of dollars.

Contracts in Texas

A contract is defined as a promise or set of promises with legal consequences. Normally, contractual promises are enforceable in a court of law. The law gives official recognition of the written contractual promises and offers remedies when the promises are not fulfilled.

The Supreme Court of Texas has noted that every contract includes an element of confidence and trust that the parties will faithfully perform their obligations. There is no duty of good faith and fair dealing unless the duty is created by express language in the contract or a special relationship of trust and confidence exists between the parties to the contract.

In Texas, the requirements for a valid written contract are: 1) an offer; 2) an acceptance in strict compliance with the terms of the offer; 3) a meeting of the minds (which is actually a subpart of the accepted elements, not an independent element; 4) each party’s consent to the terms; 5) consideration; and 6) execution and delivery of the contract with the intent that it be mutual and binding.

A basic element of the contract is the promise, which may be an express or implied promise made by one party for the purpose of assuring another person that a particular action or restraint from a particular action will occur. This is objectively determinable from the parties’ words or actions and not from either party’s subjective intentions.

Contracts may be unilateral or bilateral. A unilateral contract has only one promisor; the promisee makes no commitment. Mutuality of obligation is not essential for a unilateral contract to be formed. A unilateral contract is completed by the promisee’s performance of the act or acts called for by the promisor, not by the promisee’s making of any reciprocal promises. The promisor becomes bound to provide the promised benefit when the promisee delivers the bargained-for performance. There is no binding unilateral contract unless the promisee performs, or at least partly performs the acts requested by the promisor. Until such time, the promisor may revoke its offer. An option agreement is a common unilateral contract. An option agreement is a promise, or offer, by the optionor that the optionee may accept or reject. Until the option is exercised in accordance with the offer, the contract remains unilateral. The contract becomes binding when the option is properly exercised.

A bilateral contract is one in which there are mutual and/or bilateral promises made between the parties. If the parties have entered into a bilateral contract in which their promises are the only consideration for the agreement, their obligations must be mutual and binding for the contract to be valid. A common example of a bilateral contract is one in which one party promises to deliver goods to the other, and the other party promises to pay the specified purchase price.

There must be an offer, an acceptance and consideration for a contract to be recognized and enforceable. To prove a valid offer a party must show 1) the offeror intended to make an offer, 2) the terms of the offer were clear and definite, and 3) the offeror communicated the essential terms of the offer to the offeree.

The offer may dictate the manner, time and place of acceptance of the offer. Under such circumstances, an offer not accepted in a timely or proper manner lapses. When an offeree rejects an offer, the offer is terminated

An acceptance must be identical to the offer or there is no binding contract. Generally, an acceptance must not change or qualify the terms of the offer or the offer is rejected. When an offer prescribes the manner of acceptance, its terms must be followed in such manner of acceptance in order to create a contract. If an offeree fails to accept in the prescribed manner and attempts to accept in some other manner, a contract is formed only if the offeror waives strict compliance with provisions concerning the manner of acceptance.

An oral offer may be accepted by execution of a written instrument that embodies the terms of the agreement. Further, a written offer may, in some circumstances, be accepted orally. Acceptance may also be shown by conduct.

An acceptance is valid only if made before an offer is revoked or lapsed. An acceptance takes effect and creates a contract when it is communicated to the offeror. Acceptance is not effective when some abstract conduct other than communication to the offeror occurs. The accepting party may change his or her mind until the act of acceptance is actually communicated to the offeror.

Although an acceptance is effective only when communicated to the offeror, when an offer may be validly accepted by mail, the “mailbox” rule provides that the communication has been made and the contract is binding when the offeree deposits a properly addressed letter of acceptance in the mail, regardless of whether it is actually received by the offerror.

Mutual assent is often described as a “meeting of the minds.” Evidence of mutual assent in written contracts generally consists of the parties’ signing the contract and delivery of the contract with the intent to bind. To determine whether a meeting of the minds existed, a court reviews what the parties actually said and did. The parties’ failure to agree on a material term precludes a meeting of the minds necessary for a valid contract.

In some cases, what appears to be a valid offer and acceptance results in only a voidable contract because one party’s consent was, in fact, procured by fraud, undue influence, duress, or mistake.

Under Texas law, a party must protect personal interests by reading a contract before signing it. Absent fraud, the person is not excused from the consequences of failing to meet this obligation. If a person signs a contract without knowledge of its contents, they are presumed to have consented to the terms of the contract. Claims of belief that provisions differed from those plainly set out in the written contract are not generally admissible.

ADOPTION IN TEXAS

Who May Adopt and Be Adopted.

(a) Subject to the requirements for standing to sue under Chapter 102 of the Texas Family Code, an adult may petition to adopt a child who may be adopted.
(b) A child residing in Texas may be adopted if:

(1) the parent-child relationship as to each living parent of the child has been terminated or a suit for termination is joined with the suit for adoption;
(2) the parent whose rights have not been terminated is presently the spouse of the petitioner and the proceeding is for a stepparent adoption;
(3) the child is at least two years old, the parent-child relationship has been terminated with respect to one parent, the person seeking the adoption has been a managing conservator or has had actual care, possession, and control of the child for a period of six months preceding the adoption or is the child's former stepparent, and the nonterminated parent consents to the adoption; or
(4) the child is at least two years old, the parent-child relationship has been terminated with respect to one parent, and the person seeking the adoption is the child's former stepparent and has been a managing conservator or has had actual care, possession, and control of the child for a period of one year preceding the adoption.

(c) If an affidavit of relinquishment of parental rights contains a consent for the Department of Protective and Regulatory Services or a licensed child-placing agency to place the child for adoption and appoints the department or agency managing conservator of the child, further consent by the parent is not required and the adoption order shall terminate all rights of the parent without further termination proceedings.

Prerequisite to Filing Petition for Adoption
Texas Family Code Sec. 162.002 states:

(a) If a petitioner is married, both spouses must join in the petition for adoption.

(b) A petition in a suit for adoption or a suit for appointment of a nonparent managing conservator with authority to consent to adoption of a child must include:

(1) a verified allegation that there has been compliance with Subchapter B ; or
(2) if there has not been compliance with Subchapter B, a verified statement of the particular reasons for noncompliance.

Pre-adoptive and Post-placement Social Studies

In a suit for adoption, pre-adoptive and post-placement social studies must be conducted as provided in Chapter 107 of the Texas Family Code.

Preferential Setting

The court shall grant a motion for a preferential setting for a final hearing on an adoption and shall give precedence to that hearing over all other civil cases not given preference by other law if the social study has been filed and the criminal history for the person seeking to adopt the child has been obtained.

Preparation of Health, Social, Educational, and Genetic History Report

(a) This section does not apply to an adoption by the child's:

(1) grandparent;
(2) aunt or uncle by birth, marriage, or prior adoption; or
(3) stepparent.

(b) Before placing a child for adoption, the Department of Protective and Regulatory Services, a licensed child-placing agency, or the child's parent or guardian shall compile a report on the available health, social, educational, and genetic history of the child to be adopted.

(c) The report shall include a history of physical, sexual, or emotional abuse suffered by the child, if any.

(d) If the child has been placed for adoption by a person or entity other than the department, a licensed child-placing agency, or the child's parent or guardian, it is the duty of the person or entity who places the child for adoption to prepare the report.

(e) The person or entity who places the child for adoption shall provide the prospective adoptive parents a copy of the report as early as practicable before the first meeting of the adoptive parents with the child. The copy of the report shall be edited to protect the identity of birth parents and their families.

(f) The department, licensed child-placing agency, parent, guardian, person, or entity who prepares and files the original report is required to furnish supplemental medical, psychological, and psychiatric information to the adoptive parents if that information becomes available and to file the supplemental information where the original report is filed. The supplemental information shall be retained for as long as the original report is required to be retained.

Contents of Health, Social, Educational, and Genetic History Report

(a) The health history of the child must include information about:

(1) the child's health status at the time of placement;
(2) the child's birth, neonatal, and other medical, psychological, psychiatric, and dental history information;
(3) a record of immunizations for the child; and
(4) the available results of medical, psychological, psychiatric, and dental examinations of the child.
(b) The social history of the child must include information, to the extent known, about past and existing relationships between the child and the child's siblings, parents by birth, extended family, and other persons who have had physical possession of or legal access to the child.

(c) The educational history of the child must include, to the extent known, information about:

(1) the enrollment and performance of the child in educational institutions;
(2) results of educational testing and standardized tests for the child; and
(3) special educational needs, if any, of the child.

(d) The genetic history of the child must include a description of the child's parents by birth and their parents, any other child born to either of the child's parents, and extended family members and must include, to the extent the information is available, information about:

(1) their health and medical history, including any genetic diseases and disorders;
(2) their health status at the time of placement;
(3) the cause of and their age at death;
(4) their height, weight, and eye and hair color;
(5) their nationality and ethnic background;
(6) their general levels of educational and professional achievements, if any;
(7) their religious backgrounds, if any;
(8) any psychological, psychiatric, or social evaluations, including the date of the evaluation, any diagnosis, and a summary of any findings;
(9) any criminal conviction records relating to a misdemeanor or felony classified as an offense against the person or family or public indecency or a felony violation of a statute intended to control the possession or distribution of a substance included in Chapter 481, Health and Safety Code; and
(10) any information necessary to determine whether the child is entitled to or otherwise eligible for state or federal financial, medical, or other assistance.

Filing of Health, Social, Educational, and Genetic History Report

(a) This section does not apply to an adoption by the child's:

(1) grandparent;
(2) aunt or uncle by birth, marriage, or prior adoption; or
(3) stepparent.

(b) A petition for adoption may not be granted until the following documents have been filed:

(1) a copy of the health, social, educational, and genetic history report signed by the child's adoptive parents; and
(2) if the report is required to be submitted to the bureau of vital statistics under Section 162.006(e), a certificate from the bureau acknowledging receipt of the report.

(c) A court having jurisdiction of a suit affecting the parent-child relationship may by order waive the making and filing of a report under this section if the child's biological parents cannot be located and their absence results in insufficient information being available to compile the report.

Criminal History Report Required

(a) In a suit affecting the parent-child relationship in which an adoption is sought, the court shall order each person seeking to adopt the child to obtain that person's own criminal history record information. The court shall accept under this section a person's criminal history record information that is provided by the Department of Protective and Regulatory Services or by a licensed child-placing agency that received the information from the department if the information was obtained not more than one year before the date the court ordered the history to be obtained.

(b) A person required to obtain information under Subsection (a) shall obtain the information in the manner provided by Section 411.128, Government Code.

Residence with Petitioner.

(a) The court may not grant an adoption until the child has resided with the petitioner for not less than six months.
(b) On request of the petitioner, the court may waive the residence requirement if the waiver is in the best interest of the child.

Consent Required

(a) Unless the managing conservator is the petitioner, the written consent of a managing conservator to the adoption must be filed. The court may waive the requirement of consent by the managing conservator if the court finds that the consent is being refused or has been revoked without good cause. A hearing on the issue of consent shall be conducted by the court without a jury.
(b) If a parent of the child is presently the spouse of the petitioner, that parent must join in the petition for adoption and further consent of that parent is not required.
(c) A child 12 years of age or older must consent to the adoption in writing or in court. The court may waive this requirement if it would serve the child's best interest.

Revocation of Consent

At any time before an order granting the adoption of the child is rendered, a consent required by Section 162.010 may be revoked by filing a signed revocation.

Attendance at Hearing Required

(a) If the joint petitioners are husband and wife and it would be unduly difficult for one of the petitioners to appear at the hearing, the court may waive the attendance of that petitioner if the other spouse is present.
(b) A child to be adopted who is 12 years of age or older shall attend the hearing. The court may waive this requirement in the best interest of the child.
Sec. 162.015. RACE OR ETHNICITY.
(a) In determining the best interest of the child, the court may not deny or delay the adoption or otherwise discriminate on the basis of race or ethnicity of the child or the prospective adoptive parents.
(b) This section does not apply to a person, entity, tribe, organization, or child custody proceeding subject to the Indian Child Welfare Act of 1978

Adoption Order

(a) If a petition requesting termination has been joined with a petition requesting adoption, the court shall also terminate the parent-child relationship at the same time the adoption order is rendered. The court must make separate findings that the termination is in the best interest of the child and that the adoption is in the best interest of the child.
(b) If the court finds that the requirements for adoption have been met and the adoption is in the best interest of the child, the court shall grant the adoption.
(c) The name of the child may be changed in the order if requested.
Effect of Adoption
(a) An order of adoption creates the parent-child relationship between the adoptive parent and the child for all purposes.
(b) An adopted child is entitled to inherit from and through the child's adoptive parents as though the child were the biological child of the parents.
(c) The terms "child," "descendant," "issue," and other terms indicating the relationship of parent and child include an adopted child unless the context or express language clearly indicates otherwise.
(d) Nothing in this chapter precludes or affects the rights of a biological or adoptive maternal or paternal grandparent to reasonable possession of or access to a grandchild, as provided in Chapter 153.

Texas Law and Post-Divorce Spousal Maintenance

Under Section 8.051 of the Texas Family Code, a court shall order maintenance for either spouse only if:

1. the spouse for whom maintenance is requested was convicted of or received deferred adjudication for a criminal offense that also constitutes an act of family violence under Title 4 and the offense occurred:

a. within two years before the date on which a suit for dissolution of marriage is filed; or
b. while the suit is pending; or

2. the duration of the marriage was 10 years or longer, the spouse seeking maintenance lacks sufficient property, including property distributed to the spouse under this code, to provide for the spouse’s minimum reasonable needs, as limited by Section 8.054, and the spouse seeking maintenance:

a. is unable to support himself or herself through appropriate employment because of an incapacitating physical or mental disability;
b. is the custodian of a child of the marriage of any age who requires substantial care and personal supervision because a physical or mental disability makes it necessary, taking into consideration the needs of the child, that the spouse not be employed outside the home; or
c. clearly lacks earning ability in the labor market adequate to provide support for the spouse’s minimum reasonable needs, as limited by Section 8.054.

Section 8.052 of the Texas Family Code states that a court shall determine the nature, amount, duration, and manner of periodic spousal maintenance payments by considering all relevant factors, including the following:

1. the financial resources of the spouse seeking maintenance, including the community and separate property and liabilities apportioned to that spouse in the dissolution proceeding, and that spouse’s ability to meet the spouse’s needs independently;
2. the educational and employment skills of the spouses, the time necessary to acquire sufficient education or training to enable the spouse seeking maintenance to find appropriate employment, the availability of that education or training, and the feasibility of that education or training;
3. the duration of the marriage;
4. the age, employment history, earning ability, and physical and emotional condition of the spouse seeking maintenance;
5. the ability of the spouse from whom maintenance is requested to meet that spouse’s personal needs and to provide periodic child support payments, if applicable, while meeting the personal needs of the spouse seeking maintenance;
6. acts by either spouse resulting in excessive or abnormal expenditures or destruction, concealment, or fraudulent disposition of community property, joint tenancy, or other property held in common;
7. the comparative financial resources of the spouse, including medical, retirement, insurance, or other benefits, and the separate property of each spouse;
8. the contribution by one spouse to the education, training, or increased earning power of the other spouse;
9. the property brought to the marriage by either spouse;
10. the contribution of a spouse as homemaker;
11. marital misconduct of the spouse seeking maintenance; and
12. the efforts of the spouse seeking maintenance to pursue available employment counseling as provided by Chapter 304, Labor Code.

Section 8.053 states that except as provided by Subsection (b), it is presumed that maintenance under Section 8.051(2) is not warranted unless the spouse seeking maintenance has exercised diligence in:

1. seeking suitable employment; or
2. developing the necessary skills to become self-supporting during a period of separation and during the time the suit for dissolution of the marriage is pending.

This section does not apply to a spouse who is not able to satisfy the presumption in Subsection (a) because the spouse:

1. has an incapacitating physical or mental disability;
2. is the custodian of a child of the marriage of any age who requires substantial care and personal supervision because a physical or mental disability makes it necessary, taking into consideration the needs of the child, that the spouse not be employed outside the home.

Except as provided in subsection (b), a court:

1. may not order maintenance that remains in effect for more than three years after the date of the order; and
2. shall limit the duration of a maintenance order to the shortest reasonable period that allows the spouse seeking maintenance to meet the spouse’s minimum reasonable needs by obtaining appropriate employment or developing an appropriate skill, unless the ability of the spouse to provide for the spouse’s minimum reasonable needs through employment is substantially or totally diminished because of:

a. physical or mental disability;
b. duties as the custodian of an infant or young child; or
c. another compelling impediment to gainful employment.

If a spouse seeking maintenance is unable to support himself or herself through appropriate employment because the spouse has an incapacitating physical or mental disability or because the spouse is the Custodian of a child of the marriage of any age who has a physical or mental disability, the court may order maintenance for as long as the disability continues.

A court may not order maintenance that requires an obligor to pay monthly more than the lesser of:

1. $2,500; or
2. 20 percent of the spouse’s average monthly gross income.

The court shall set the amount that an obligor is required to pay in a maintenance order to provide for the minimum reasonable needs of the oblige, considering employment or property received in the dissolution of the marriage or otherwise owned by the oblige that contributes to the minimum reasonable needs of the oblige.

Department of Veterans Affairs service-connected disability compensation, social security benefits and disability benefits, and workers’ compensation benefits are excluded from maintenance.

Sealing the Deal – Contracts (A Smart Investment) - Part II

There are two primary types of contracts: express contract and implied contract. The express contract is formal, and stated either verbally or in writing. The implied contract is one that is not written down, but considered to be understood between the parties. It is a matter of inference and deduction.

Though most oral contracts are not legally binding, they are undertaken on ethical principles. In the United States every contract for that sale of goods that involves an amount that exceeds $500.00 must be written to be legally enforceable. The courts generally recognize any defined meeting of the minds of competent persons with a like purpose and intent to undertake some common task as a contract. The Statute of Frauds mandates for some contracts to be enforceable they must be in writing.

There are three ways a term may be implied into a contract:

1. By custom – A contract may incorporate as an implied term any relevant custom. The custom must be well known within a particular trade and business and be generally accepted within such trade or business.
2. By statute – The most common terms implied by statute are those relating to the sale and supply of goods and services. The Sale of Goods Act of 1979 provides for implied terms in respect of: 1) that the seller has the right to sell the goods 2) that goods sold are of satisfactory quality; 4) that goods sold are reasonably fit for the purpose they were bought; and 5) that goods sold by sample correspond with the sample. The Supply of Goods and Services Act of 1982 states with regard to implied terms in a contract that the service will be carried out with reasonable care and skill, within a reasonable time and for a reasonable price.
3. By the Court – Courts do not like to interfere in the construction of contracts. They will only imply terms into a contract under certain circumstances and with certain pre-conditions. Terms can be implied in fact or in law.

A contract implied in fact is one in which the circumstances imply the parties have reached an agreement even though they have not done so expressly.

A contract implied in law (the quasi-contract) is not an actual contract, but a means for the courts to remedy situations in which one party would be unjustly enriched were he or she not required to compensate the other. If one party has agreed to a term, but the other party has not, it will not be implied into a contract. Further, terms will not be implied into a rigorous contract with detailed written terms where any omission would be deemed to be deliberate.

Express terms of a contract outline the primary obligations of the parties. Distinction has been made among the various types of express terms. This distinction is important as it sets apart the remedies available to the innocent party in the event of a breach. Such terms fall into three categories:

1. Conditions – the major terms of the contract.
2. Warranties – the minor terms of the contract.
3. Miscellaneous terms – neither conditions or warranties.

An implied term cannot contradict an express term. However, it may widen or narrow an express term when necessary if the express term is flexible.

The basic rule is that parties to contracts must perform as specified in the contract unless (1) the parties agree to the change in the contract's terms, or (2) the actions of the party who deviates from the terms of the contract are implicitly accepted ("ratified") by the action or non-action of the other party. If there is no acceptance of deviation from the terms of the contract, and the deviation is serious enough to make any real difference in the intended result of the contract, then the deviating party is said to have breached the contract. His justified prevention or interference with the performance of the other party is also a breach. Of course if one party fails more or less entirely to perform the contract, or totally prevents the performance of the contract by the other party, the situation is straightforward. The situation becomes more complex where the argument is over specific terms such as the quality of materials or the timing of work. Breach of contract leaves the non-performing or improperly performing party open to a claim for damages by the other party. If the breach is a material breach, the non-breaching party is relieved of his obligations under the contract by the other party's breach. There are many possible ways for performance of a contract to give rise to dissatisfaction. The courts have been forced to analyze the matter in much more subtle terms than "breached" or "not breached." The doctrine of "substantial performance" saves a party who has largely fulfilled his obligations under a contract from suffering major loss merely because he has unintentionally fallen short in some particular manner which does not affect the essence of the contract.
A breach is not defined as promises laid out explicitly in a contract, rather a breach of contract is defined as any violation of law, principal or obligation. It is this definition of breach that leaves room for parties to file suits involving breaches of implied contracts.

The Whistleblower - Pharmaceutical Fraud

In September of 2007, Bristol-Myers Squibb Company and its wholly owned subsidiary, Apothecon, Inc. agreed to pay over $515 million to resolve a broad array of civil allegations involving their drug marketing and pricing practices. In December 2007 the Corporate Crime Reporter reported Merick to pay $670 million to settle federal and state charges that it violated the False Claims Act by engaging in nominal pricing fraud. In 1986, more than $20 billion was paid out in fraud lawsuits brought by whistleblowers.

Pharmaceutical fraud cases represent the largest percentage of False Claims Act recoveries by the United, and qui tam relator whistleblower lawsuits. The False Claims Act Is a federal whistleblower law which has its roots in the civil war era and allows private citizens to file actions against federal contractors and corporations who conduct fraud against the government and the public. It is the United States’ most powerful tool for rooting out fraudulent government contracts. With the advent of the Medicare prescription plan, even more federal tax dollars will flow into the pockets of large ruling companies illegally and in violation of current law. In an industry with great power and profitability, there are lots of pressures upon companies to ignore federal laws designed to prevent fraud and curb costs.

Pharmaceutical fraud can take a variety of forms and involve complex issues. The following are some example:

Charging the government for drugs not used and returned to pharmacy providers;
Marketing, promoting, and selling drugs for use other than those approved by the FDA;
Paying kickbacks and inducements to physicians, hospitals and pharmacists to prescribe or otherwise favor a drug; Engaging in off-label marketing; and Providing false data to the FDA or withholding negative data from FDA about the efficacy of a pharmaceutical drug or medical device in clinical research trials to get approval to sell and market the pharmaceutical drug or medical device.

Currently, the United States Government, along with the governments of 15 states and the District of Columbia, have joined with two whistleblowers who allege that drug manufacturer Wyeth defrauded U.S. taxpayers out of hundreds of millions of dollars. According to the Wall Street Journal, Wyeth is accused of overcharging Medicare and Medicaid programs nationwide for purchases of it’s acid-reflux drug Protonix. Under federal law, drug companies are required to offer prescriptions to federal aid programs at the lowest possible price. The Wyeth suit alleges that Wyeth was offering Protonix at a 90% discount to a private hospital, while charging the federal government much higher rates.

Other drug companies that have settled qui tam lawsuits include Pfizer, TAP Pharmaceuticals, Bayer, and Schering-Plough Corp. A federal official recently said the government has approximately 150 pharmaceutical fraud cases pending involving over 500 different drugs.

Pharmacy benefits management companies have also come under increasing scrutiny as a result of the False Claims Act. In one of the most prominent whistleblower cases reported, Phillips & Cohen represented two whistleblowers whose qui tam lawsuits resulted in a settlement of $875 million to settle the lawsuits and related criminal charges.

If you believe you have discovered fraud, you should try to assess the magnitude of the fraud and gather whatever documentary or electronic evidence is lawfully available. Be sure you do not violate the law or the terms of your employment agreement. Write down the details of any meetings or events where fraud was discussed, who was present and what documents may exist that memorialize the event. This documentation should be given to your attorney.

Keep in mind, you cannot recover in a qui tam action if another whistleblower has already filed an action based on the same documentation and information.

Whistleblower – Federal Government and Federal Government Contractor Fraud

A large percentage of the United State’s enormous annual spending goes to development and implementation of new weapons systems, facilities, equipment, supplies, and logistical and technical services through the procurement of government contracts. Such government contracts frequently involve military defense contracts such as B-1 Bombers, military tanks and vehicles, military fire power and uniforms, and extends to areas such as computer technology and food services for our troops.

Defense contractor fraud remains one of the most prominent areas of false claims litigation under the Federal False Claims Act.

In April 2009 TRW Inc.’s efforts to stop a scientist from revealing his research findings about faulty electronic components the company sold to the government for military and intelligence-gathering satellites were the basis for a whistleblower lawsuit that Northrop Grumman Corp. settled for $325 million. It was the largest settlement ever paid by a defense contractor in a whistleblower case and the second largest ever paid involving defense contractor fraud.

The whistleblower was awarded $48.7 million for his work and the work of his attorneys on the case. The Federal False Claims Act requires the government to award whistleblowers 15 to 25 percent of the amount the government recovers as a result of whistleblower cases.

A false certification of regulatory and statutory compliance, necessary to obtain a contract, can render false all claims for payment under that contract. A contractor’s failure to meet contract performance requirements and failure to provide goods and services in conformance with federal statutes and regulations may be sufficient to violate the False Claims Act.

Presentation of a claim to the Government for payment, when the failure to abide by contract requirements has not been disclosed to the Government, is deemed equivalent to false certification of compliance with such laws and regulations. Therefore, if a claim for payment is submitted and the contract requirements have not been fulfilled in all respects, if federal funding is conditioned on compliance, gives rise to a False Claims Act case. Claims may be false, even though goods or services otherwise fulfill contract specifications.

Defense contractor fraud remains one of the most prominent areas of false claims litigation. Billions of dollars have been recovered from defense contractors, mainly as a result of whistleblowers. Some common ways in which defense contractors have tried to defraud the government are as follows:

1. Cross-charging. This occurs when a defense contractor improperly shifts costs and expenses from one defense contract to another in order to boost its profits.
2. Improper Product Substitution. Contracts frequently request the contractor use a specific grade or quality of product or part. There are often requirements that the products be new or made in the United States. Defense contractors often attempt to save costs by substituting cheaper or substandard parts.
3. Improper Cost Allocation. Under this scheme the defense contractor will improperly allocate or shift cost from private businesses or foreign governments onto the cost-plus contracts they have with the United States government.
4. Worthless or Substandard Products or Services. In this case the defense contractor with knowledge or through reckless neglect, delivers products that do not perform as promised.
5. Inflation or Costs and Charges. In a cost-plus contract, the government pays the defense contractor a set price plus a percentage of the contractor’s costs for producing the product. In this scheme the contractor improperly inflates their costs and charges to increase revenue the company earns from the U.S. government.
6. Violations of the Truth-In-Negotiations Act. Weapons systems and equipment can be extremely complex. Much of the time, there is only one company in the world producing a particular weapon system or piece of equipment. The government has no choice but to purchase the particular weapon system or piece of equipment from a single supplier. Because other competitors are not bidding, the government has no way of knowing if it is paying a fair price. The Truth-In-Negotiations Act is designed to prevent this problem by requiring defense contractors to disclose all relevant information about its costs to the government in such situations. Defense contractors may sometimes attempt to inflate their costs and expenses because they have no competitor bidding for the contract.

Whistleblower: The False Claims Act and The Fraud Enforcement and Recovery Act of 2009 – Part I

In 2003, John Kopchinski was earning $125,000 a year selling the drug Bextra for Pfizer. He had a baby son, and his wife was pregnant with twins. The Gulf War veteran says that, "In the Army, I was expected to protect people at all costs." At Pfizer, though, he was expected to sell Bextra, even though it raised the risk of heart attacks and strokes. After Kopchinski expressed his concerns about Bextra's safety, Pfizer fired him. He eventually got a new job paying $40,000 a year.

Kopchinski hired attorney Erika Kelton of Phillips & Cohen. In 2005, Pfizer withdrew Bextra from the market. Now Pfizer is pleading guilty to felony charges of promoting Bextra for unapproved uses. Pfizer will pay penalties of $2.3 billion, and Kopchinski will get a $51.5 million share for filing the "qui tam" lawsuit under the False Claims Act (FCA) that helped the government collect these penalties. Kopchinski is one of five whistleblowers sharing in the settlement. He says that he does not expect his life to change much now, according to a news account of this settlement available from Reuters.

Crutial court decisions such as the one in the Pfizer case have assisted whistleblowers in coming forward. In 2008, there has been rapid legislative response in the enforcement arena. On May 20, 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 (FERA). This act authorizes substantial new funding to the Department of Justice and other federal enforcement agencies for the investigation and prosecution of offenses. FERA amends the False Claims Act (FCA) in a manner that may increase the exposure of every company that does business with the federal government and every person or entity that supplies goods or services that are reimbursed by federal government dollars.

The FCA provides for recovery of civil penalties and treble damages from any person who knowingly submits or causes the submission of false or fraudulent claims to the United States for money or property. Under the most commonly-enforced provisions of the statute, a person is liable for “knowingly” (1) presenting or causing the presentment of a claim for payment or approval; (2) making a “false record or statement to get a false or fraudulent claim paid or approved by the Government;” or (3) conspiring to defraud the government “by getting a false or fraudulent claim allowed or paid.” The FCA also penalizes so-called “reverse false claims, “ in which a person “knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the Government.” The FCA defines “knowingly” as having “actual knowledge” of falsity or acting in “deliberate ignorance” or “reckless disregard” of the truth or falsity of the information. “No proof of specific intent to defraud is required.” 31 U.S.C. §3729(b).

The FCA’s qui tam provisions empower private individuals to file litigation in federal court on behalf of the government and to share in any subsequent recovery. The FCA’s qui tam provisions provide enormous incentives for qui tam Realtors (whistleblowers) to expose fraud against the government, awarding 15-30% of settlement or judgment proceeds to Realtors, who may also be entitled to reasonable attorney fees’ and costs, which may be substantial.

FCA civil damages and penalties can be severe. Defendants may be held liable for up to three times actual damages plus penalties between $5,500 and $11,000 per claim. Depending on the method in which the “claims” are calculated, civil penalties may far exceed the actual damages the government sustained.

FERA amends the definition of “claim” in a significant way. The new definition of “claim” is:

(A) any request or demand, whether under a contract or otherwise, for money or property and whether or not the United States has title to the money or property, that –(i) is presented to an officer, employee, or agent of the United States; or (ii) is made to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government’s behalf or to advance a Government program or interest, and if the United States Government –

(I) provides or has provided any portion of the money or property requested or demanded; or
(II) will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.

FCA liability may now be triggered by any false claim made to any recipient of federal money so long as the money is used to “advance a Government program or interest.” FCA realtors and the Department of Justice will now be able to push to give this provision the broadest possible interpretation.

The old FCA penalized a person who “knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the Government.” 31 U.S.C §3729(a)(7). FERA now defines “obligation” to include the retention of any overpayment, which opens new avenues of exposure against federal contractors or grantees for knowingly retaining government “overpayments.”

In the past, the FCA afforded protection to “any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee.” 31 U.S.C. § 3730(h). FERA extends whistleblower protections beyond “employees” to a “contractor or agent” and no longer requires any prohibited retaliatory action be taken by an employer. The FERA now reads “any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment. 31 U.S.C. § 3730(h).

An FCA action must be brought within six years of the date on which a violation was committed, or within three years of the date on which the government knew or should have known that a violation was committed, and in no event more than 10 years after the date on which the violation was committed.

Protect Your Trademark and Service Mark

Protectability of Mark

Equibrand Corporation v. Reinsman Equestrian Products, Inc. and Dale R. Martin, 2007 U.S. Dist. LEXIS 36229 (United States District Court for the Northern District of Texas, Dallas Division). According to Equibrand, to determine whether a mark is protectable, a court must assign the mark into one of five categories, which, arranged in order of increasing distinctiveness, are: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fanciful.” A surname is generally regarded as “descriptive” by the 5th Circuit, which is distinctive only if it has acquired a secondary meaning. Canon Props, 752 F 2d at 155.

In order for a party to prevail under the Lanham Act, a party must first show that the word or phrase in dispute is registerable or protectable. Zatarians, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786,790 (5th Cir. 1983). March Madness Athletic Ass’n v. Netfire, Inc., 310 F. Supp. 2d 786, 806, (N.D. Tex. 2003). After protectability is established, a Plaintiff must prove the likelihood of confusion. A mark is protectable if it is either (1) inherently distinctive or (2) has acquired distinctiveness through secondary meaning. Two Pesos Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769, 112 S. Ct. 2753, 120 L.Ed.2d 615 (1992).

Secondary Meaning

A trademark has successfully acquired a secondary meaning when “in the minds of the public, the primary significance of a product feature or item is to identify the source of the product rather than the product itself. Secondary meaning is a term of art in trademark law. It refers to the situation which arises when a company has a mark which might ordinarily be ineligible for protection were it not for the fact that the name has come to be closely associated, (in a distinct market), with a particular manufacturer’s product or service.

In order to establish a secondary meaning for a term, a plaintiff must show that the primary significance of the term in the minds of the consuming public is not the product by the producer. The burden of proof to establish secondary meaning rests at all times with the plaintiff; this burden of proof is necessary to establish secondary meaning for a descriptive term. The mark must denote to the consumer “a single thing coming from a single source,” to support a finding of secondary meaning. Both direct and circumstantial evidence may be relevant and persuasive on the issue. Factors such as amount and manner of advertising, volume of sales, and length and manner of use may serve as circumstantial evidence relevant to the issue of secondary meaning. While none of these factors alone will prove secondary meaning, in combination they may establish the necessary link in the minds of the consumers between a product and its source. It must be remembered, however, that the question is not the extent of the promotional efforts, but their effectiveness in altering the meaning of the term to the consuming public. Zatarians, Inc. v. Oak Grove Smoke-House, Inc., 698 F.2d 786; 1983 U.S. App. LEXIS 30159 (Feb. 25, 1983).

Survey evidence is the most preferred and persuasive manner to establish secondary meaning. However, other factors, taken together, may also establish that a mark has achieved secondary meaning, these factors include: (1) length and manner of use of the mark by Plaintiff; (2) nature and extent of advertising and promotion of the mark; (3) efforts made to promote and conscious connection in consumers mind between mark and particular product or service; and (4) Defendant’s intent to copy the mark.


What Constitutes Registered Mark?

Federal registration of a mark “including a surname” creates a presumption that the mark is distinctive. Avery Dennison Corp. v. Sumpton, 189 F.3d 868, 876 (9th Cir. 1999); Lois Sportswear, USA, Inc. v. Levi Straus & Co., 799 F.2d 867, 871 (2nd Cir. 1986). Union National Bank states “the ownership of a trademark is established by use, not by registration. The first one to use the mark is generally held to be the “Senior” user and is entitled to enjoin junior users from using the mark, or one that is deceptively similar to it, subject to limits imposed by senior user’s market and natural area of expansion.” Dawn Donut Co. v. Hart’s Food Stores, Inc., 267 F.2d 358, 364-65 (2nd Cir. 1959) (owner of mark not able to enjoin its use by others in area where owner not likely to expand).

Union National Bank of Texas, Laredo, Texas v. Union National Bank of Texas, Austin, Texas, 909 F.2d. A senior user may not exclude others in areas where he does not currently do business nor is likely to do business in the future. Citing, Dawn Donut Co. v. Hart’s Food Stores, Inc., 267 F. 2d 358, 364-65 (2d Cir. 1959).

Confusion Related to a Mark

The touchstone of infringement inquiry is whether or not Defendant’s use creates confusion as to “source, affiliation, or sponsorship” of Defendant’s goods because of its purported likeness to Plaintiff’s goods. Pebble Beach Co. v. Tour 18 I, Ltd., 155 F. 3d 526, 543 (5th Cir. 1998).

The 5th Circuit has enumerated the following list of non-exhaustive factors, no single one being dispositive, to determine whether likelihood of confusion exists (1) type of mark allegedly infringed; (2) similarity between 2 marks; (3) similarity of products or services; (4) identity of retail outlets and purchasers; (5) identity of advertising media used; (6) the Defendant’s intent; and (7) evidence of actual confusion. Taco Cabana Int’l, Inc. v. Two Pesos, Inc., 932 F. 2d 1113, 1122 n.9 (5th Cir. 1991) aff’d sub nom. See also, Two Pecos.

The first element, type of mark infringed, focuses on the strength of the mark. Strength of a service mark for purposes of analyzing likelihood of confusion is dependent on both placement of mark on spectrum of distinctiveness and the extent to which the consumers in the relevant market place recognize the mark as an indicator of source.

Similarity of the mark is determined by comparing the marks “appearance, sound and meaning.” The relevant inquiry is whether, under the circumstances of the use, the marks are sufficiently similar and that prospective purchasers are likely to believe that the two users are somehow associated. The greater the similarity between products, the greater the likelihood of confusion between marks.

Irreparable Injury

In a trademark case, a plaintiff may show irreparable injury by establishing a substantial likelihood of confusion. When a likelihood of confusion exists, the plaintiff’s lack of control over the quality of the defendant’s goods constitutes immediate and irreparable harm, regardless of the actual quality of the goods. The injury lies in the fact that the plaintiff no longer can control its own reputation and goodwill.

Injunctive Relief

To obtain preliminary injunction, moving party must demonstrate (1) substantial likelihood of success on merit; (2) substantial threat of irreparable injury if injunction not granted; (3) threatened injury to Plaintiff must outweigh threatened injury to Defendant; and (4) granting of preliminary injunction serves public interest. See, Cherokee Pump & Equipment, Inc. v. Aurora Pump, 38 F.3d 246, 249 (5th Cir. 1994). If the moving party cannot prove all four elements then the court must deny injunctive relief since the decision to grant preliminary injunction is the exception rather than the rule. Miss. Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 618, 621 (5th Cir. 1985).

Union National Bank of Texas, Laredo, Texas v. Union National Bank of Texas, Austin, Texas, 909 F.2d 839 (5th Cir. 1990). The owner of a federally registered mark is only entitled to injunctive relief in the market it actually serves plus its “natural zone of expansion.” He may not enjoin others from using the mark if the likelihood of confusion between his product and the infringer’s is minimal or non-existent, such as where the parties to the action use the mark in totally different markets, or for different products. The “zone of expansion” doctrine represents a conundrum within the conundrum of trademark law. There is no established definition. A party seeking an injunction for trademark infringement must clear several hurdles in order to prevail. First, he must prove that the name he seeks to protect is eligible for protection. He must then prove he is the senior user. Having proven these elements he must then show a likelihood of confusion between his mark and that of the defendant. Finally, because he is asking for the equitable remedy of an injunction, he must show that the likelihood of confusion will actually cause him irreparable injury for which there is no adequate legal remedy.

To succeed in a trademark infringement claim, a party must first show that it has a protectable right in the mark and second, show that there is a likelihood of confusion. The non-exhaustive list of factors, or digits of confusion, includes: (1) the type of trademark allegedly infringed; (2) the similarity between the two marks; (3) the similarity of the products or services; (4) the identity of the retail outlets and purchasers; (5) the identity of the advertising media used; (6) the defendants’ intent; and (7) any evidence of actual confusion. Brennan’s, Inc. v. Bert Clark Brennan; Blake W. Brennan, 289 Fed. Appx. 706; .S. App. LEXIS 16890.

Fathers Have Rights – Establishing Paternity

Paternity is defined as the quality or state of being a father. Many issues arise in the face of a father being denied access to his child or wondering if he is truly the child’s father. Where paternity of a child is in question, a mother or alleged father may ask the court to determine paternity of one or several possible fathers.

Most paternity actions involve a child born out of wedlock. However, paternity actions also occur between married persons where someone other than the husband is the father of the child, or where the husband has fathered a child outside of the marriage. There is a presumption that a child born to a married woman is the child of the husband. However, this presumption can be overcome by DNA or other valid evidence.

If you are questioning paternity, think about when the child could have been conceived. Consider when you had relevant or timely intercourse. Understand that paternity is determined by testing DNA from the father and the mother through the use of genetic fingerprinting. DNA testing is done by drawing blood or by taking a buccal swab, when cells are wiped from the inside of the mouth with a cotton swab. These tests can determine the father of a child with up to 99% accuracy. DNA testing is currently the most advanced and accurate technology to determine parentage. Generally paternity testing is paid for by the father.

If you file a paternity suit, you can request the court order DNA testing. A court may order the mother, father and the child to submit to testing. Paternity testing can be done during pregnancy or when the child is as young as one day old.

Paternity proceedings can be filed by the alleged father, mother, child or child support division of a state. A private action for paternity is usually prosecuted to secure child support payments from the father, parenting time with the child, and/or fair rights and privilege allocation.

Some men are confident that they are the biological father and wish to maintain a legal relationship with the child whether or not they are the father and thus either initiate paternity actions or consent to the entry of a paternity order. The paternity order entitles the father to visitation time with the child and creates a legal duty for the father to provide for the support of the child in addition to awarding him rights and privileges regarding the child’s future development.

When you consent to the entry of a paternity order, absent fraud, you consent for life. Most jurisdictions will not allow you to escape the consequences of that order, including the requirement of payment for the support of the child. If there is a chance that you will resent the child, or wish to break off the relationship with the child or, if you ultimately learn that you are not the child’s biological father, make certain you obtain a DNA test before legally admitting and therefore confirming that you are a child’s father.

Custody of a child can either be awarded to the father or the mother in a paternity action depending on the facts. Child support in a paternity action is generally set according to state law standards unless the parties sign an agreement providing for the payment of child support that is approved by the court.

Reasons to establish paternity: to provide the child with a needed identity; to confirm rights, privileges and duties of a parent; to know the health history of both the mother and father for medical care and treatment of a child; establish financial support for the child; establish health insurance coverage, social security eligibility, inheritance and other benefits; and seek public assistance where qualified.

Debt Recovery Concerns

Awarding credit is a fundamental facet of American finance and worldwide business. It helps nascent companies get off the ground by providing vital capital, which in turn allows the economy to grow and business opportunities to be created. There is, however, another side to credit funding. The very nature of an individual or a company creating debt to obtain needed capital creates short and long term problems. While companies hope that their business plan is solid and promising enough to achieve cash flow and growth while allowing for repayment of their debts, the fact is that sometimes credit-driven investments do not create projected returns, making for a potentially unpleasant situation for borrowers and lenders alike. When debtors fail to repay debt as promised, more often than not the creditor will have multiple remedies under state and federal law.

During a prolonged economic recession such as the one we are now experiencing, there is a noted increase in both the frequency and promptness of debt collection. As lending companies are themselves not immune to the current recession, timely recovery of past due sums is becoming an increasingly critical consideration. Following a default, lenders should pursue reimbursement within whatever timeframe is appropriate under then relevant circumstances. Regardless of whether or not your decision comes at an inconvenient time for the indebted party, the fact remains that a lender has rights that permit prompt recovery to effectively carry out their business.

In order to properly ensure that delinquent sums due are eventually received, two useful allies are reputable debt collectors/debt collection agencies and attorneys with experience in credit/debt resolution, bankruptcy, or related areas. The two will often work in collaboration, as legal enforcement may be necessary to bring about prompt settlement. It is recommended that the debt collector you retain be local to the area where your debtor is located, as often times localized nuances of business procedures, federal, state, and city statutes, etc. can limit the effectiveness of collectors based elsewhere who are likely to be less familiar with these statutory obligations. Your attorney should be licensed in the state of the debtor.

Significantly, one must address missed payments promptly, and give careful consideration to elevating your collection efforts by turning to legal and financial professionals. Many of the rules and laws at work in the field of credit lending are highly complex, greatly increasing the possibility of errors without third party assistance. Following default, the longer you wait to take action, the more complicated the collection process can become while lowering the prognosis for successful recovery. While not all delinquent payments are the result of intentional nonpayment, the majority of them are, calling for prompt action to avoid “stale claims.” Generally, if you feel as though legal action is the next necessary step, this is very likely the case.

By Alexander Newgard, Administrative Clerk, The Nacol Law Firm PC

Active Military Duty: How Will It Affect My Relationship With My Child?

Beginning September 1, 2009, under new Texas legislation the courts have a right to temporarily amend certain existing orders concerning a parent who is ordered to military deployment, military mobilization or temporary military duty.

If a conservator is ordered to military deployment, military mobilization, or temporary military duty that involves moving a substantial distance from the conservator’s residence so as to materially affect the conservator’s ability to exercise the conservator’s rights and duties in relation to his or her child, either conservator may file for an order under subchapter (a) of Section 153.702 of the Texas Family Code.

The Court may then render a temporary order in a proceeding under this subchapter regarding:

1. possession of or access to the child; or
2. child support.

A temporary order of the court under this subchapter may grant rights to and impose duties on a designated person (with certain limitations) regarding the child, except the court may not require the designated person to pay child support.

After a conservator’s military deployment, military mobilization, or temporary military duty is concluded, and the conservator returns to the conservator’s usual residence, the temporary orders under this section terminate and the rights of all affected parties are governed by the terms of any court order that was applicable before the conservator was not ordered to military deployment, military mobilization, or temporary military duty.

Further, if the conservator with the exclusive right to designate the primary residence of the child is ordered to military deployment, military mobilization, or temporary military duty, the court may order appointment of a designated person to exercise the exclusive right to designate the primary residence of the child during the military deployment, military mobilization, or temporary military duty in the following order of preference:

1. the conservator who does not have the exclusive right to designate the primary residence of the child;
2. if appointing the conservator described by Subdivision (1) is not in the child’s best interest, a designated person chosen by the conservator with the exclusive right to designate the primary residence of the child; or
3. if appointing the conservator described by Subdivision (1) or the person chosen under Subdivision (2) is not in the child’s best interest, another person chosen by the court.

A designated person named in a temporary order rendered under this section has the rights and duties of a nonparent appointed as sole managing conservator under Section 153.371 of the Texas Family Code.

The court may limit or expand the rights of a nonparent named as a designated person in a temporary order rendered under this section as appropriate for the best interest of the child.

If the court appoints the conservator without the exclusive right to designate the primary residence of the child, the court may award visitation with the child to a designated person chosen by the conservator with the exclusive right to designate the primary residence of the child.

1. The periods of visitation shall be the same as the visitation to which the conservator without the exclusive right to designate the primary residence of the child was entitled under the court order in effect immediately before the date the temporary order.

2. The temporary order for visitation must provide that:

a. the designated person under this section has the right to possession of the child for the periods and in the manner in which the conservator without the exclusive right to designate the primary residence of the child is entitled under the court order in effect immediately before the date of temporary order.
b. the child’s other conservator and the designated person under this section are subject to the requirements of Section 153.316(a) with the designated person considered for purposes of that section to be the possessory conservator;
c. the designated person under this section has the rights and duties of a nonparent possessory conservator under Section 153.376(a) during the period that the person has possession of the child; and
d. the designated person under this section is subject to any provision in a court order restricting or prohibiting access to the child by any specified individual.

3. The court may limit or expand the rights of a nonparent designated person named in a temporary order under this section as appropriate for the best interest of the child.

If the parent without exclusive right to designate the primary residence of the child is ordered to military deployment, military mobilization, or temporary military duty, the court may award visitation with the child to a designated person chosen by such conservator if the visitation is in the best interest of the child.

The temporary order for visitation must provide that:

1. the designated person under this section has the right to possession of the child for the periods and in the manner in which the conservator described by Subsection (a) would be entitled if not ordered to military deployment, military mobilization, or temporary military duty;

2. the child’s other conservator and the designated person under this section are subject to the requirements of Section 153.316, with the designated person considered for purposes of that section to be the possessory conservator;

3. the designated person under this section has the rights and duties of a nonparent possessory conservator under Section 153.376(a) during the period that the designated person has possession of the child; and

4. the designated person under this section is subject to any provision in a court order restricting or prohibiting access to the child by any specified individual.

The court may limit or expand the rights of a nonparent designated person named in a temporary order under this section as appropriate and as is in the best interest of the child.

Child Custody: Staying Close to Your Kids

When a custody lawsuit commences, parents need to be thinking primarily about what is in the best interest of the child(ren). The needs and rights of the child(ren) are of paramount importance in a child custody case and the court’s primary focus.

In accordance with Section 153.002 of the Texas Family Code, parents are ordinarily considered to be equal in their right to parent their child(ren). It is the best interests of the child(ren) that are paramount, and the aim of the Texas Family Code is to:

1. Assure that child(ren) will have frequent and continuing contact with parents who have shown the ability to act in the best interest of the child(ren);

2. Provide a safe, stable, and non-violent environment for the child(ren); and

3. Encourage parents to share in the rights and duties of raising their child(ren) after the parents have separated or dissolved their marriage.

If you are a parent who is preparing for a custody battle, you would do well to make this your primary goal throughout the litigation.

Vengeful parents often engage in destructive conduct by trying to move out of state in an attempt to separate the child(ren) geographically from the non-custodial parent. If vengeance is the custodial parent’s primary motive, this has many benefits: it becomes more difficult for the non-custodial parent to exercise visitation, and at the same time makes it more difficult (and expensive) for the non-custodial parent to seek relief through the courts for denied visitation or other wrongful acts by the custodial parent. A move-away, depending upon distance, can also isolate the child(ren) from the non-custodial parent. If you suspect your spouse may do this, you need to be prepared and act proactively. A key item to have incorporated into final paperwork is an “anti-move-away” clause. Essentially, this states that if the custodial parent moves more than a certain number of miles away, custody changes to the remaining parent and/or restricting the permanent domicile of the child(ren) to designated counties.

Stay meaningfully involved in your child(ren)’s lives on a regular and continuing basis. Being heavily involved with your child(ren) for very short periods of time will not bring favor in the eyes of the court.

Keep a detailed record or diary of the details of how much you have been involved with your child(ren)’s school and extracurricular activities. Attend school meetings. Take pictures. Schedule family vacations. Visit relatives and friends and schedule sleepovers with your child(ren)’s peers. Take your child(ren) to the dentist and the doctor. Don’t spoil your child(ren), reasonably discipline your child(ren) when necessary and document why you took such action. Take advantage of extra time extended you by your spouse and try to extend visitation when possible if only for a couple of hours. Initiate and support birthdays, school activities, and college requirements. Document all relevant case issues and facts.

Keep in mind that your child(ren) are not equipped to deal with the range of emotions experienced by an adult, and that ventilating your personal difficulties on them is not only unhelpful, but can be a form of abuse and can create lasting emotional scars and is viewed with disfavor in the courthouse.

Parents preparing for custody cases before the court in Texas must be mindful of the extraordinary damage they can do when denigrating the other spouse in front of their child(ren). Such behavior is not only damaging to the child(ren), but may and usually will, be taken into consideration by the court. A noticeable failure to maintain self-control may be considered an indicator of an inability to parent.

If you can remain involved in your child(ren)’s lives enough to find out how his or her relationship is with your former spouse, you may be able to build a better case to show the court you are the better custodial parent, and in the meantime productively provide for your child(ren) in his or her best interest.

BY ALL MEANS STOP THE FORECLOSURE

Given the current state of affairs with regard to lenders, mortgagees, loan servicing agencies, collection agencies and the like with respect to home or business mortgages, it is frequently impossible to determine with whom you are speaking, what authority they have and what remedies they are actually capable of agreeing to in a home or business loan dispute. Indeed, frequently the actual owner of the debt is so lost in cybernetic space on Wall Street that a signature cannot even be produced to consummate a valid foreclosure.

I frequently speak with people whose loans have been overcharged or convoluted under the guise of late payments and fees, penalty interest, attorney’s fees, reinstatement fees and the like when in fact payments are current or the delay in receipt is due to the bookkeeping errors or computer generated nightmares which frequently exist at mortgage companies and/or servicing lenders. Clients are lost in the backlog of understaffed and overworked mortgage companies who simply make entries that are either late, erroneous, unjustified or not representative of the actual payments that have been submitted to them by the borrowers/homeowners.

The lenders then, usually through computer generated directives, retain attorneys and foreclose or simply foreclose through the existing trustees or substitute trustees when, in point of fact, the loan is current or if it is not current, the disputed sums claimed or their timeliness it is not the fault of the borrower.

It is critical that a homeowner in this situation make an immediate effort to get a court order enjoining the foreclosure before the foreclosure occurs. There are a myriad of legal rights, remedies, defenses and claims that are either lost or seriously watered down when asserted after the foreclosure sale occurs. It is far easier to put the dry spaghetti in stacks and separate it as appropriate than to try to unravel the spaghetti once it has been cooked. Lenders who proceed with foreclosure are by deed granted legal title, or title is passed to a third party purchaser by virtue of the loan documents and the foreclosure sale. This makes it more difficult for an attorney to enforce the rights of the borrower given the claims, expense and costs of the third parties, tying your lawyer’s hands to some degree in what he is capable of doing for you to save your home or business property.

A temporary restraining order injunction upon proper affidavit with sufficient facts is in most cases granted allowing a home or business owner to enforce his claims against the lender or mortgage company while retaining title to the property during the litigation process which can take anywhere from thirty days to three years depending on the court, the county and the jurisdiction.

It is not uncommon for the court to order the borrower to pay all payments into the court registry or an escrow fund where a true and honest accounting of what is being paid while the case is pending can be applied to the final judgment of the court. If the borrower/homeowner’s case has merit and the lender is in breach, state law permits the payment of attorney’s fees in addition to the claims for fees which are ordinarily authorized in form loan documents which puts added pressure on the lender/mortgagee to come to the table and settle the matter based on the actual facts of the case. However, these efforts are hampered greatly if the foreclosure has already occurred. Remember also that a lawyer needs, depending on the court and jurisdiction, enough time in advance of the foreclosure sale date to prepare a petition, temporary restraining order, and request for injunctive relief and/or claim for damages as the case may be in order to properly enforce the rights of the client.

Sadly enough, it is not uncommon for the first words of the client to be “They foreclosed on my house and all my payments are current, what are we going to do now?” The regrettable answer is, we are going to have to set aside the foreclosure and reverse all the legal title convoluted actions which have occurred by virtue of the Trustee Sale, in addition to making a legal effort to reinstate the loan. In most cases this is far more expensive to the client in attorney’s fees, time and consternation than simply preventing the sale in the first place by injunction.

In Sickness and in Health: When is the Right Time to Prepare a Will

Despite the recent drama over Michael Jackson’s death, he did many things right when it comes to end-of-life estate planning. The most critical thing Jackson did was to name a business associate as executor to carry out his wishes and designate a guardian for his minor children. He also set up a family trust that should keep the division of his estate out of the public eye.

As opposed to Jackson, Steve McNair, former NFL quarterback, died intestate (without a will). According to reports not personally verified by the writer, McNair had a wife, two children from a former marriage, and two children from a previous relationship. Now, instead of being able to decide for himself how his property should be distributed, the distribution of his assets will be determined by a formula set forth under state law.

Too often people do not get around to making a will. The problem is there is no deadline to make sure it is done before your death, and people do not like to think about dying. It is important to remember that if you die without a will state law dictates what happens to your property and assets and a court of law may determine who has custody of your children.

While mortality is a difficult topic to discuss or think about, leaving your family with large financial decisions isn’t pleasant either. Start by assessing your overall financial picture – your net worth. You need to identify not only your financial investment assets but also the value of your real and personal property.

Craft a will. With the assistance of an attorney, you can outline how you wish your estate – your assets and liabilities – to pass through after your death. Your assets along with your debt will need to be handled by your family. Identify anything that may need to be taken care of in case you are incapacitated. Check on taxes that may need to be paid by your estate. Remember to keep your will updated if you move, remarry, divorce, or experience any significant change in your life.

In some cases you may wish to discuss your desires with trusted family members. By letting others know what your plans are, you can prevent misunderstandings after your death. In some cases complete privacy is indicated. Choose an executor. Whether it is a family member or friend, the executor needs to be someone that can be trusted to handle the decisions and paperwork surrounding your death and the probate of your estate. Choose a successor. Be careful when choosing a spouse whose health may be failing along with your own.

Protect your assets with a trust. Setting up trusts can allow you to provide for your family and beneficiaries after you are gone and in some cases bypass probate and the associated expenses altogether. Plus, in the appropriate case and jurisdiction a trust may aid in lessening the potential taxes on your estate. Talk over your planning and estate needs with a financial advisor. You can provide an income to a surviving spouse and children, safeguard your assets until your children reach a set age or establish a trust for a charitable organization. The benefits of a trust are: federal unified tax credit to leave assets tax-free; providing income to one beneficiary for his or her lifetime, and the balance to others; professional investment assistance and management; and postponing estate taxes with property transfers. The various types of trusts you may want to consider and/or discuss with your attorney are: revocable living trust; testamentary trust; living trust; and irrevocable and charitable trusts.

Keep your children in mind. Make sure that you name a guardian who will care for them into adulthood. Establish how you want your children to inherit your estate, whether it is through investments or trusts. Choosing the guardian of your children is very important. Be sure that whomever you name is aware of and willing to take on the responsibility. You may want to also take into consideration their age and health.

Periodically review your plan (especially in the case of divorce or death of a spouse or beneficiary). Your estate will change over time. Do not assume that what you set up five years ago will be what is best for your present estate. Money grows, investments change, you may downsize your housing needs – reassess your plan and make the changes in writing.

Women at Risk: The Hazards of a Bad Relationship

Abusive men, and women (physical or mental), are all about control and frequently evolve from abusive homes themselves. Police desire to help abused women, but often even after a complaint has been filed, women will not pursue the charges out of fear. Feeling helpless, they are often terrified, brain-washed and really believe that they have nowhere to go. It is not uncommon for an abuser to be very charismatic and after beating his victim return home the following day with flowers showing great affection to his victim. Unfortunately, the victim tends to believe the transparent words “I’ll never do it again!”

One of the most frustrating things for family and friends outside a battering relationship is trying to understand why the abused person doesn’t just leave. It is important to remember that extreme emotional abuse is always present in domestic violence situations. Violence takes place in many forms, is unpredictable and can happen all of the time or just once in a while. Violence is criminal including physical and sexual assault. It is paramount to remember that physical violence, even among family members, is wrong and against the law.

Some of the reasons partners stay in domestic violence situations are:

1. Economic dependence.
2. Fear of greater physical danger or danger for children.
3. Fear of being hunted down and suffering worse beatings.
4. Survival. Fear that the abuser will kill.
5. Fear of emotional damage to children.
6. Fear of losing custody of children.
7. Lack of alternative housing.
8. Lack of job skills.
9. Social isolation resulting in lack of support from family and friends.
10. Social isolation resulting in lack of information about her alternatives and support systems.
11. Lack of understanding from family and friends, police, ministers.
12. Negative response from community, police, courts, social workers.
13. Fear of involvement in the court process.
14. Fear of the unknown, chronic anxiety, and/or depression.
15. Acceptable violence. Living with constant abuse numbs the victim so that they are unable to recognize that they are involved in a set pattern.
16. Ties to the community. The children would have to leave their school, and family would have to leave friends and neighbors.
17. Ties to home and belongings.
18. Family pressure.
19. Denial.
20. Loyalty.
21. Love. Often an abuser is quite loveable and loyal when he is not being abusive.
22. Shame and humiliation. “I don’t want anyone else to know.”
23. Guilt. They believe the abuse is caused by some inadequacy of their own.
24. Demolished self-esteem.
25. Lack of emotional support.

The following is a bill of rights for women in abusive relationships:

1. I have the right to ask for what I want.
2. I have the right to say no to requests or demands I can’t meet.
3. I have the right to express all of my feelings, positive or negative.
4. I have the right to change my mind.
5. I have the right to make mistakes and not have to be perfect.
6. I have the right to follow my own values and standards.
7. I have the right to say no to anything when I feel I am not ready, it is unsafe or it violates my values.
8. I have the right to determine my own priorities.
9. I have the right not to be responsible for others’ behavior, actions, feelings or problems.
10. I have the right to expect honesty from others.
11. I have the right to be angry at someone I love.
12. I have the right to be uniquely myself.
13. I have the right to feel scared and say “I’m afraid.”
14. I have the right to say “I don’t know.”
15. I have the right not to give excuses or reasons for my behavior.
16. I have the right to make decisions based on my feelings.
17. I have the right to my own needs for personal space and time.
18. I have the right to be playful and frivolous.
19. I have the right to be healthier than those around me.
20. I have the right to make friends.
21. I have the right to change and grow.
22. I have the right to be treated with dignity and respect.
23. I have the right to be happy.

Anyone can be a victim of domestic violence. Although both men and women can be abused, most victims are women. Children in homes where there is domestic violence are more likely to be abused or neglected. Even if the children are not physically harmed, they are likely to have serious emotional and behavioral problems and scars.

Abusers try to control their victim’s lives. When abusers feel a loss of control – like when the abused person leaves them – the abuse may get worse. If you are in an abusive situation, take special precautions when you leave. Develop a safety plan.

Father’s Rights – Visitation Enforcement

What is needed for visitation enforcement?

1. A valid court order that has been signed by a judge or issued by the district clerk’s office, certified as having been signed by a judge.

2. Be sure to read your order thoroughly. If you do not understand any of the provisions, take it to an attorney and have them explain it to you.

3. The custodial parent must have been validly served with the court order or it must be shown that the they had prior knowledge of the court order and its content.

4. The custodial parent must have full knowledge of the above two factors and must be intentionally and willfully violating the court order.

5. Despite the fact that you may have a valid court order, many police departments do not want to get involved in enforcing civil orders. If you call the police department and show them the order they may or may not assist you in gaining access to your children. Despite whether you get your children or not, you need to ask them to create a police report stating that you were there to pick up your children and noting the time and date you were present. If the police refuse to prepare a report, go to a local grocery store or fast food restaurant and purchase something so that you have a receipt stating that you were in the area and stating the date and time you were there.

How to prove a denial of visitation.

1. Take a witness along with you – preferably an off-duty constable or deputy or neutral party.

2. Have your witness stay in the vehicle, but with the window down so that he/she can hear any conversations that take place. Have your vehicle parked in such a way that the witness can see you at all times.

3. Take a copy of your divorce decree along with you which shows you are suppose to have possession of your children on the date and time you arrive to pick them up.

4. Always be on time, and if possible a few minutes early.

5. If the custodial parent does not answer the door or have the child available to exercise visitation then call the police and request a Police Incident Report. If the police will not issue a police report then make sure you document the incident as best as possible. After two or three violations, take the reports, along with any witness statements, to an attorney to discuss how to bring an enforcement action against the custodial parent who is violating the order.

6. Take a tape recorder with you, have it running from the time you approach the residence, and do not stop it until you leave. Keep the tape recorder running as you leave the area. As you approach the residence state the following facts in the recorder: your complete name, the address you are approaching, the reason you are there “I am going to pick up my children as stated in the final decree,” state who is with you and why, state the time of day, state when you are leaving and a brief description of what occurred. Keep a written record of each recording and label them according to date.

7. Keep a calendar of each denied visitation.

8. Make sure you have a credible witness each time you try to exercise your possession with your children.

9. Do not argue with your ex-spouse regardless of how angry you are or whether you get your children or not. Staying calm will work in your favor in the long run.

10. If you file an enforcement action, if the custodial parent continues to deny you visitation after the suit is brought, continue to go and knock on the door to exercise your visitation, as each separate violation of the court order can be used in the enforcement action.