Author: JGL Law

Social media, like Facebook, Instagram, and Twitter, allow people to connect with friends and family, sharing information, photos, and other life updates. For some, the updates are occasional; for others, social media is a platform to provide others with a minute-by-minute chronicle of their daily lives.

Let’s follow our friend “@KrissyK”[1] for a day:

 @KrissyK “Woke up late. Running around like crazy. I hate mornings that I can’t seem to get it together #letsgetthisfridaystarted” – via mobile from Laurel, MD at 8:15 a.m.

 @KrissyK “Uuuugh, late AND traffic. Finally made it to work. Boss handed it to me AGAIN.” – via web from Greenbelt, MD at 9:30 a.m.

@KrissyK “Lunch can’t come soon enough. Hitting up that Chipotle, ya dig?” – via mobile from Greenbelt, MD at 12:30 p.m.

@KrissyK “Food coma. Don’t know how anyone is supposed to be productive after this.”

[2]

– via web from Greenbelt, MD at 1:45 p.m.

@KrissyK “So pissed at John right now. I don’t know where he gets off thinking he can act like that.” – via mobile from Greenbelt, MD at 2:30 p.m.

@KrissyK “Finally out of work and ready to get it onnnnn. #girlsnight” – via mobile from Laurel, MD at 6:15 p.m.

@KrissyK “Starting this night off  right!#shotsonshot”

[3] – via mobile from Laurel, MD at 7:30 p.m.

            @KrissyK “Gettin faddedddddd at Lux, suckers. #pursebeers”– via mobile from Washington, DC at 9:02 p.m.

@KrissyK “Club can’t even handle me right now.”

 – via mobile from Washington, DC at 9:56 p.m.

@KrissyK “Top shekf for thrsr girkoels. #lovemahgirls” – via mobile from Washington, DC at 10:30 p.m.

 @KrissyK “Wastyyyyyy face. #gohsrdorgihomr”

[5] – via mobile from Washington, DC at 1:30 a.m.

 “Over sharing” on social media can do more than annoy your Facebook friends and Twitter followers. Social media, such as your Facebook and Twitter posts, may be admissible (meaning used against you as evidence) in court. But when and how? Let’s say our friend @KrissyK was later involved in a drunk driving accident in which, tragically, one her friends was killed. @KrissyK’s Twitter posts reveal what she did throughout the day, her location at various times, whether she posted from a computer or mobile device, and, in some cases, who she was with. Would @KrissyK’s posts be admissible as evidence against her? The now ubiquitous social media presents a unique set of evidentiary challenges with inherent reliability issues. The Maryland Courts continue to develop guidelines for admissibility of social media evidence. In Independent Newspapers, Inc. v. Brodie, the court described social media as “sophisticated tools of communication where the user voluntarily provides information that the user wants to share with others.”[6] Social media, however, has obvious reliability and authenticity issues – how can you be sure that the profile purporting to be “@KrissyK” was made by the defendant? How can you verify that it is regularly maintained by the defendant?  And how can you verify that the post in question was made by the defendant and not a friend, a hacker, or another unauthorized user? In Griffin v. State, the Court of Appeals aptly noted that, “Anyone can create a MySpace profile at no cost, as long as that person has an email address and claims to be over the age of fourteen.”[7] The Court elaborated:

 The identity of who generated the profile may be confounding, because ‘a person observing the online profile of a user with whom the observer is unacquainted has no idea whether the profile is legitimate.’ The concern arises because anyone can create a fictitious account and masquerade under another person’s name or can gain access to another’s account by obtaining the user’s username and password…[8]

 Fictitious profiles, profiles for pets, and, more nefariously, profiles to frame another or divert law enforcement attention from an individual have all been created. Like any evidence, social media evidence must have sufficient indicia of reliability to be admissible. In Griffin v. State, an individual by the MySpace name of “Sistasouljah,” who purported to be born on 10/02 /1983 and from Port Deposit, MD posted:

 “FREE BOOZY!!!! JUST REMEMBER SNITCHES GET STITCHES!! U KNOW WHO YOU ARE!!”

 Prosecutors believed “Sistasouljah” was the defendant’s girlfriend and sought to introduce the MySpace print outs into evidence. The Griffin Court looked to, inter alia, its decision in Dickens v. State[9] and Judge Grimm’s opinion in Lorraine[10] to consider its admissibility, specifically considering authentication of the purported statements under Md. Rule 5-901. Dickens and Lorraine both looked to circumstantial evidence to authenticate digital media. In Dickens v. State, the court found sufficient circumstantial evidence to authenticate, and admit into evidence, text messages, despite the fact that messages did not have a “sender” phone number and/or could not be directly linked to the defendant. The content of the messages included information and “exceedingly small number of persons,” including the defendant, would have known and found this sufficient to authenticate the messages as statements of the defendant. In Lorraine v. Markel American Insurance Company, The Honorable Paul W. Grimm of the Southern District of Maryland considered the admissibility of various ESI, including web postings:[11]

 One commentator has observed ‘[i]n applying [the authentication standard] to website evidence, there are three questions that must be answered explicitly or implicitly. (1) What was actually on the website? (2) Does the exhibit or testimony accurately reflect it? (3) If so, is it attributable to the owner of the site?’

 The same author suggests that the following factors will influence courts in ruling whether to admit evidence of internet postings: ‘The length of time the data was posted on the site; whether others report having seen it; whether it remains on the website for the court to verify; whether the data is of a type ordinarily posted on that website or websites of similar entities (e.g. financial information from corporations); whether the owner of the site has elsewhere published the same data, in whole or in part; whether others have published the same data, in whole or in part; whether the data has been republished by others who identify the source of the data as the website in question?’ [12] Both Dickens and Lorraine required substantial external indicia of reliability before the social media could be admitted. In accord with these and other decisions, the Griffin Court found insufficient evidence to authenticate the “Free Boozy” message as a statement of the defendant’s girlfriend:

 [T]he picture of Ms. Barber, coupled with her birth date and location, were not sufficient ‘distinctive characteristics’ on a MySpace profile to authenticate its printout, given the prospect that someone other than Ms. Barber could have not only created the site, but also posted the ‘snitches get stitches’ comment. The potential for abuse and manipulation of a social networking site by someone other than its purported creator and/or user leads to our conclusion  that a printout of an image from such a site requires a greater degree  of authentication than merely identifying the date of birth of the creator and her visage in a photograph on the site in order to reflect that Ms. Barber was its creator and the author of the “snitches get stitches” language.[13]

 In doing so, the court cautioned that, “we should not be heard to suggest that printouts from social networking sites should never be admitted,”[14] and suggested that proper authentication may come via examination of the purported publisher, examination of internet history, identification of the publishing IP address, or subpoenaing the social media network itself for additional identifying information and indicators of ownership.[15] Although still developing, Maryland courts have indicated that substantial indicators of reliability are required to authenticate and admit[16] social media evidence. With satisfactory evidence that the defendant was in fact the sender, that she created and/or maintains the Twitter handle in question, and that she published the posts in question, her Tweets likely are admissible as evidence against her.

A common question in many Maryland divorce cases involving clients of the Islamic faith is, what happens to my Islamic Mahr, Mehrieh, Mehr (a.k.a, dowry) during my Maryland divorce?

Many immigrants who live in Maryland wed overseas in their home countries. The Middle Eastern immigrants usually wed under the Islamic tradition. In the Islamic tradition, at the time of marriage, the couple or the couple’s family negotiate what is called the Mahr, Mehrieh, Mehr, most commonly known to Americans as a dowry, at the time of marriage.

A dowry in the Muslim faith is a gift, or a promise of a gift, to the wife by the husband. It is negotiated shortly before the couple’s marriage and is often in written form. It is often in the form of gold coins, cash or land. It is not given to the wife at the time of the marriage, but the wife has the right to ask for it at any time during the marriage or upon the dissolution of the marriage.

In many Middle Eastern countries,  the rights of women upon marriage breakdown are much fewer than those of men. Upon dissolution of the marriage, the wife often receives little from the division of family assets and often little to no spousal support.  The dowry  serves as a form of security or money the wife can  use in the future for her own benefit upon marriage breakdown. Additionally, in many Middle Eastern countries, it is common that only the husband can initiate and file for divorce.  The exception to this general rule allows a wife to file for divorce only when  the husband physically or mentally abuses her or is addicted to alcohol or drugs. In situations where the wife wants to divorce the husband for reasons other than those listed above, such as incompatibility (i.e., “irreconcilable differences”), the wife can use her dowry to negotiate a divorce. This means that the wife can forgive or waive her dowry in return for the husband’s permission to divorce. So, the dowry is not merely a gift, has a different purpose overseas, and is used in ways which cannot be used in Maryland or other U.S. States.

The dowry is often a large amount to show the love, affection, and commitment of the groom to the bride at the beginning of the marriage. The dowry is promised to the wife at the beginning of marriage regardless of whether the husband actually has or is going to be able to have the dowry at the time the wife asks for it, or at the time of marriage breakdown. Needless to say, it creates difficulties, unrealistic expectations and legal ramifications for the husband if he is not able to pay it upon the wife’s request.  For instance, an immigrant from Iran, who promised his wife 70 gold coins at the time of the marriage who then immigrated to the United States and now works a blue color job cannot possibly afford to pay the wife’s dowry.

These problems compound when the wife decides to ask for her dowry from the husband at the time of marriage breakdown in Maryland. The wife, on top of often having a default entitlement to half (50%) of the family assets (in cases of long term marriages), spousal support or possibly child support, will ask for her dowry. This often means that the husband would receive less than 50% or sometimes none of the family assets he would otherwise be entitled to receive under Maryland family law.

Numerous problematic situations can arise concerning the Mehr. For example, sometimes the amount of dowry is larger than the entire of pool of family assets; sometimes the amount of dowry is not even negotiated by the husband and wife, but by their families; sometimes the dowry is not in written form, leading to disputes as to what exactly is owed; sometimes it is a ploy for the wife to extort the husband by marrying him; or sometimes the dowry is agreed to 20 or 30 years before divorce when the husband’s or familial financial situation is significantly different. The problems are vast and never ending.

Maryland courts often struggle to determine whether they should respect religious traditions of a family or to create a fair outcome with regards family assets and obligations of spouses towards one another upon marriage breakdown.

In Part 2 of this blog post, I will discuss the ways in which Maryland or other U.S. courts have dealt with the dowry at the time of marriage breakdown.

While in law school, I was often asked what area of law I was interested in practicing. Inevitably someone would ask me if I was interested in becoming a family law attorney.  My almost instantaneous response was, “Oh no! Too much drama!”  Instead, I chose to practice employment law – an area that I naively believed would have fewer emotions involved than Family law.

But it turns out I was wrong.

Right up there on the things-that-make-people-highly-emotional list along with a bad marriage or custody battle are problems in the working world: being fired, perceiving your employer as treating you badly or unfairly, not getting leave for being sick or a needed medical treatment, and every other conceivable problem that can arise in the work place. Most of us prefer to work in an environment where we can thrive, where our accomplishments are recognized, we are viewed as valued contributors, and where we have a bright future.  And so when the specters of unfairness, bullying, and lack of appreciation take over the work place, it is possible to understand how quickly people jump to the conclusion: “I work in a hostile work environment. I want to sue.”

But do you really work in an illegal hostile work environment? Most of the time, the answer is “No.”

The first thing everyone needs to know is that you do not have a claim based on “hostile work environment” alone.  It is not a standalone cause of action.

This is what I call the “Jerk Boss Rule”—while it is probably not good business sense for your boss (or coworker) to be a jerk, it is not necessarily unlawful.  Title VII (the federal law prohibiting workplace discrimination) and its state and local counterparts[1] do not guarantee a workplace free of troubles.  Instead, these statutes prevent employers from taking discrimination motivated by the employee’s status in a protected class: race, gender[2], national origin, color, religion, pregnancy,[3] disability,[4] or because of age.[5] So, the actions of the “jerk boss” that imposed an adverse employment action against the employee must tie back to the employee’s status in one of these protected classes.

In turn, the law only recognizes the existence of a hostile work environment when the hostility is founded on the employee’s status in a protected class.  In order to meet the first legal standard of proving a hostile work environment, an employee must prove that: (1) the harassment was unwelcome; (2) was based on the employee’s status in a protected class; (3) the harassment was “sufficiently severe and pervasive enough to alter the conditions of [his or] her employment and create an abusive atmosphere”; and (4) is imputable to the employer.[6]

The first factor in this test is usually pretty easy to meet.  If you’re complaining about what’s going on at work, it’s most likely behavior that you do not welcome.  It’s the next several areas where things get tricky.

The second step requires an employee needs to show that the harassment was linked to the employee’s status in the protected class.  In other words, if your response to the question “Why do you believe your boss treated you this way?” is anything other than “it’s motivated by my race, gender, national origin, color, religion, pregnancy, disability, or because of age,” you might not have the foundation on which to bring a hostile work environment claim.[7]  So in this respect, what your boss does to you may not be as important as why your boss treats you a certain way or took certain actions against you.

The third factor is often where things fall apart.  It is not enough that the employee subjectively perceives the environment as hostile and abusive. An employee must demonstrate that the actions in question are both subjectively, and objectively hostile and abusive, meaning that “a reasonable person [in the same position] would have found the environment” abusive.”[8]  So, what is “severe and pervasive?” Well, most of the time (but not always)[9] it’s safe to assume that a single or just a few isolated incidents are not enough to constitute “pervasive” harassment.[10]  As for severity, the Fourth Circuit Court of Appeals ruling in Patterson v. County of Fairfax does a good job explaining this requirement .[11] In that case, the plaintiff alleged “repeated incidents of verbal harassment, . . . also incidents in which her fellow officers sprayed mace in her car, on her chair, and directly into her face. Additionally, she claimed that her fellow officers intentionally interfered with her ability to call for back-up, and occasionally failed to respond to successfully transmitted requests.”[12] It was these actions that the court found “demonstrate[d] a hostile work environment for purposes of Title VII.”[13]

By contrast, the Third Circuit Court of Appeals affirmed the District Court’s ruling that a hostile work environment did not exist where many of the claimed hostile actions fell within the scope of common managerial functions.[14]  In Fichter v. AMG Res. Corp., the plaintiff’s evidence to support her hostile work environment included allegations of her supervisor:

(1) telling her she should get a job closer to home, (2) telling her she was disrespectful if she disagreed with him, (3) telling her to turn more work over to [male coworker #1], (4) wanting her work done more quickly so that [her supervisor’s] work was not held up, (5) asking [male coworker #1], but not Fichter, to do work for [her supervisor] even though [male coworker #1] worked for Fichter, (6) reassigning a female employee who previously worked with her to another position and leaving her with twice the workload, (7) not giving her a raise in four to five years, (8) requiring that she advise [her supervisor] if she would be arriving late or leaving early, (9) asking her for information but leaving the office without telling her before she could provide it to him, (10) keeping track of her vacation time, (11) providing her with little notice when auditors were coming, (12) asking for her opinion, but doing what he wanted if he did not like her answer, (13) not compensating her when she filled in for [male coworker #2], and (14) not respecting the extra work she performed ‘unless it benefitted [her supervisor].’[15]

So, what should you do if you think you’re being subject to a hostile work environment? Try to take a step back and think objectively about what is going on and the underlying reasons for the hostility.  Then, seek a legal opinion.  Every single case is different, and so it is important to have a legal professional examine the facts in your individual situation and provide an evaluation.

When parties divorce, there are always unforeseen circumstances that arise in the future.  It’s not uncommon to experience substantial change in life events such as a change in career (particularly if you are in the military or work for a corporation that is prone to relocating personnel), or potential new spouse (even when your client “swears” he or she will never date again – don’t be surprised!), or other circumstances leading to a relocation.

Your family law attorney will try and anticipate any potential circumstances and either address them in your separation agreement (if you and your spouse agree to enter into one) or with the Court. However, relocating with children after a divorce is not usually foreseeable and often leads to subsequent litigation that can occur months or even years after a divorce is finalized.

Relocation cases are very challenging, both to the parties, the Courts, and especially for any mental health professionals working with the children. There are many logistics to take into consideration. Will the relocation be cross-country or a car-drive away? Are the children old enough to travel unaccompanied? What will the cost of transporting the children entail?  If accompanied by an adult, will the adult stay over at the destination for the weekend?  Should the non-custodial parent have the majority of the holidays and school breaks?  What is an appropriate amount of time for the summer and will the custodial parent be willing to forego many of these non-school times simply to relocate.

While family law attorneys litigate for our client’s interests in a marital home, bank accounts, retirement accounts, and equity in businesses, nothing is more precious, hard-fought and polarizing as determining custody of children, particularly when one parent is faced with greatly reduced access in a relocation case.

A parent’s rights and ability to raise his or her children are extremely important.  The Supreme Court has termed the right to rear one’s child “essential.”[1] The right to rear one’s child constitutes a right “far more precious . . . than property rights.”[2] The interest of parents in their relationship with their children is a fundamental liberty interest protected by the Fourteenth Amendment to the United States Constitution.[3] A parent has a recognized right to the companionship, care, and custody of her or his minor children that she or he cannot be deprived without due process of law.[4] Article 24 of Maryland’s Declaration of Rights protects this same liberty interest.[5]

To determine custody in Maryland, the trial court is required to determine the best interests of the minor child.[6]  The term “best interests” is commonly used by lawyers and judges in the Courtroom. In Montgomery County v. Sanders, the Court of Special Appeals set forth a list of factors that a trial court should consider to determine the children’s best interests.[7]  Maryland Appellate Courts have held that “[t]he respective interests of the parents are relevant … and should be considered by the court; but the interests of the child take precedence over any conflicting interest of either parent.). . . . Certainly, the relationship that exists between the parents and the child before relocation is of critical importance.”[8] 

The trial court typically looks to protect the consistency and stability of the children.  While not specific to relocation, the following cases demonstrate an appropriate exercise of the trial court’s discretion.  In Levitt v. Levitt, the best interests of the child are presumed to be “a continuation of custody, recognizing the importance of a child’s need for continuity.”[9] In Roginsky v. Blake-Roginsky, the Maryland Court of Special appeals upheld the trial court’s award of custody to the appellee and mother, Ms. Blake-Roginsky.[10] The trial court awarded custody to the mother as she had “been the primary custodian and caretaker for a significant period of time prior to trial,” because the “parties could not cooperate, joint custody was not realistic,” and “because the child was functioning well, citing consistency of environment as a primary reason.” [11]

Any party considering a relocation should first and foremost, should consider these factors, strongly consider any impact the relocation may have on their children, and try to determine a reasonable plan to keep the children as involved with the non-custodial parent as possible.  New technology such as iPhones, Facetime, and Skype permit a level of face to face access that did not exist in recent years. The trial court will also want to hear testimony and evidence of the proposed home, schools, extracurricular activities and other information in order to form its determination as to whether to permit a relocation and determine an appropriate access schedule.

The 2013 legislative session brought about some positive changes in the area of taxability of indemnity deeds of trusts (otherwise known as indemnity mortgages), supplemental instruments, and refinance instruments.  This new law applies to any of these types of financial instruments recorded on or after July 1, 2013.

Anyone who has ever had to pay recordation and transfer taxes in Maryland knows first-hand how costly it can be to record the mortgages/deeds of trust required to secure repayment of a loan in this State.  This is because Maryland is one of the most expensive states in the union, where the average transfer costs adds as much as 2-3% to the transaction costs.  Although it varies from county to county ($5.00 per thousand dollars in Baltimore, Howard, and Prince George’s Counties as the lowest ends, and up to $12.00 per thousand dollars for Frederick and Talbot Counties as the highest), this new law will help ease that burden for borrowers, which comes as a much needed relief in these still struggling economic times.

The most notable change is the new legislation that raises the threshold to trigger taxability of indemnity deeds of trusts (or IDOTs).  The previous law triggered taxability of an IDOT when the loan being guaranteed was $1 Million Dollars or more.  Now, the threshold is $3 Million Dollars.  However, it should be noted that a series of loans that are part of the same transaction are considered one loan for purposes of determining the threshold.  This means you cannot record multiple IDOTs for a single transaction in order to escape the taxability threshold as the amounts on all of the documents will be calculated together to determine taxability.  In addition, taxability is triggered on the amount of the loan whereas the collection of the tax is based on the amount of debt secured by the IDOT.  It should also be noted that some counties require specific IDOT Affidavits to be submitted with the recording adding to the complexity of the paperwork for settlement practitioners.  These changes can be found in Maryland’s Tax-Property Article § 12-105.

This legislative session has also resulted in new recordation tax exemptions for refinances of commercial property.  Previously, this exemption was only available for borrowers refinancing their principal residence.  Now, the legislature has expanded the exemption allowing for recordation tax exemptions on commercial properties and other residential properties that are not principal residences.  This will allow Maryland borrowers to refinance their investment properties at lower interest rates without being hit by a massive tax bill during recordation of the new mortgage.

In order to qualify for this exemption, you must be the original mortgagor and the tax is based on the difference between the current principal balance (rather than the original loan amount) and the face amount of the new mortgage.  This means if someone is refinancing a property where the original principal balance is greater than the face amount of the new mortgage, there will not be any recordation taxes charged.  It should be noted that all refinances must be accompanied by a refinance affidavit complying with the requirements of §12-108(e) of the Tax-Property Article.  Some counties, like Prince George’s, have their own specific refinance affidavit form which must be used.  In addition, this exemption is not mirrored for county transfer taxes in counties (like Prince George’s) that charge county transfer taxes.  In those counties, the transfer tax is still based on the difference between the original loan amount and the new loan amount.

Finally, the new law has expanded and clarified the definition of a “supplemental instrument” to include instruments that confirm, correct, modify or “amend and restate” existing IDOTs and other lien instruments.  Supplemental instruments are taxable only if the face amount of the supplemental instrument or the amount of debt secured (in the case of an IDOT) exceeds the outstanding principal balance of the existing loan (the same as the refinance tax stated above).  Therefore, if the instrument being recorded is only making “non-monetary” changes to the document, then there is no tax.  These changes can be found in § 12-101 of the Tax-Property Article.

These new laws bring about a much needed change that will allow for more Maryland borrowers to take advantage of the current low interest rates being offered.  Additionally, this will hopefully create a trickle-down effect and alleviate some of the potential foreclosure issues that many Maryland borrowers are facing.  By reducing the recordation taxes and expanding the exemption to more types of borrowers and properties, more borrowers will be able to refinance their properties, thereby lowering monthly payments and allowing people to avoid a potential future foreclosure.

John and Kate are recently divorced and they live in Maryland.  They had three wonderful children during their marriage.  Now the questions arise: should child support be paid, and if so, how much? The goal in calculating child support is to ensure that any children are impacted as little as possible by a shift from one household to two. Child support in Maryland is based on an “Income Shares” model.  This means that a Court will look at the combined incomes of the parents, here John and Kate, and allocate any support to be paid out of that combined “family pot.” For child support purposes, a parent’s “income” is defined by statute.  Md. Code Ann., Fam. Law Section 12-201(b) defines actual income as:

1. “Actual income” means income from any source.
2. For income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership or closely held corporation, “actual income” means gross receipts minus ordinary and necessary expenses required to produce income.
3. “Actual income” includes: (i)  salaries; (ii)  wages; (iii)  commissions; (iv)  bonuses; (v)  dividend income; (vi)  pension income; (vii)  interest income; (viii)  trust income; (ix)  annuity income; (x)  Social Security benefits; (xi)  workers’ compensation benefits; (xii)  unemployment insurance benefits; (xiii)  disability insurance benefits; (xiv)  for the obligor, any third parent payment paid to or for a minor child as a result of the obligor’s disability, retirement, or other compensable claim; (xv)  alimony or maintenance received; and (xvi)  expense reimbursements or in-kind payments received by a parent in the course of employment, self-employment, or operation of a business to the extent the reimbursements or payments reduce the parent’s personal living expenses.
4. Based on the circumstances of the case, the court may consider the following items as actual income: (i)  severance pay; (ii)  capital gains; (iii)  gifts; or (iv)  prizes.
5. “Actual income” does not include benefits received from means-tested public assistance programs, including temporary cash assistance, Supplemental Security Income, food stamps, and transitional emergency, medical, and housing assistance.

Md. Code Ann., Fam. Law Section 12-201(b). Despite being set forth by statute, there are arguments to be made in determining a parent’s income, specifically for a determination of income from self-employment and any “discretionary” items listed in subsection (4). Of note, “gifts” can include expenses paid and support given to a parent by his or her parents, relatives and/or friends.  If payment for an expense (direct) or transfer of money to a parent is consistent, dependable and there is no real expectation of repayment, the Court may include those amounts as “income” of a parent in determining child support. If one parent or the other is not working, the Court may still be able to attribute income to that parent.  This can occur if the Court determines that a parent is voluntarily impoverished, it may determine the parent’s potential income.  “Voluntary impoverishment” can be found when a parent makes “the free and conscious choice, not compelled by factors beyond his or her control, to render himself or herself without adequate resources.”  Goldberger v. Goldberger, 96 Md. App. 313, 327, 624 A.2d 1328 (1992). Once the Court determines both parties’ respective incomes, there are two methods by which the Court may set child support: (a) by using the Maryland Child Support Guidelines, or (b) by engaging in a “needs-based” analysis. If the combined monthly incomes of the parents is $15,000 or less, the Court presumes that the Maryland Child Support Guidelines are correct and will set an appropriate amount of support.  A presumption, however, does not preclude either parent from arguing that an application of the Maryland Child Support Guidelines would be inappropriate. What goes into the Maryland Child Support Guidelines?

1. The parties’ respective gross monthly incomes (including any alimony award);
2. Any health insurance paid on behalf of the children; and
3. The allocation of time the children are with each parent.

What else can go into the Maryland Child Support Guidelines?

1. Other child support awards or alimony being paid by a parent;
2. Work-related childcare costs;
3. Extraordinary medical expenses;
4. Cash medical support; and
5. Any “other” additional expense (this can include such things as private school tuition and costs).

The Maryland Department of Human Resources has an online “calculator” which is available to anyone: http://www.dhr.state.md.us/CSOCGuide/App/disclaimer.do. If the parents’ combined monthly income is more than $15,000, the appropriate amount of child support is within the Court’s discretion.  In such situations, the Court may use an extrapolation, or extension, of the Maryland Child Support Guidelines or may engage in a “needs-based” analysis. A “needs-based” analysis looks at the children’s actual monthly needs to determine an appropriate amount of support.  This can include anything from housing, food and clothing, to private school, tutoring, and horse-back riding lessons.  It is important to remember that a child’s needs may vary drastically from case to case, depending upon the standard of living the family enjoyed prior to separation.      

On October 15, 2013, the United States Court of Appeals for the Eighth Circuit issued a False Claims Act (“FCA”) judgment allowing the case to continue against Bayer Healthcare Pharmaceuticals (“Bayer”), based on the relator’s allegations that the company fraudulently induced the Department of Defense (“DoD”) to enter contracts under which a drug known as Baycol was purchased for the use of armed service men and women.

United States ex rel. Simpson v. Bayer Healthcare, No. 12-2979 (8th Cir. Oct. 15, 2013).

In the complaint, the relator alleged that the company fraudulently caused the government to make reimbursements for Baycol prescriptions and also that, by making false representations about the drug’s safety, Bayer fraudulently induced DoD into the contract for payment under federally financed health care programs. Although the District Court rejected both claims, the Eighth Circuit overturned only one claim, holding that fraudulent inducement was actionable even if there is no provable economic loss to the government.

The FCA, at its core, allows whistleblower to bring claims in the name of the United States seeking to hold persons or entities liable for defrauding the government through the presentation of false claims for payment. Because FCA actions seek to remedy fraud, which is controlled by Fed. R. Civ. P. 9(b), a valid claim must state with heightened particularity that a false claim for payment led directly to the government suffering economic damages.

Sometimes, where a good or service is delivered to the government, the loss is calculated by subtracting the value of what was received from what was charged. But not in Bayer. There the majority endorsed an argument long made by the government and endorsed by the Supreme Court that actionable false claims were sufficiently pleaded as the result of the government being induced to enter supply contracts that it would not have entered into if it had been fully informed of certain risks that the company withheld – in this case, the allegedly dangerous side effects of the drug Baycol.

This decision is a significant win for government and whistleblower attorneys alike because the majority reached this conclusion despite the fact that no individual claim for reimbursement was false in the sense that the drug was not delivered as specified or that the government paid too much for it. In essence, where there normally must be specific false claims for reimbursement identifying with particularity the falsity of the claim, the Eighth Circuit is saying that all claims related to Baycol were false because DoD would not have agreed to the contract had it known of the risks associated with the drug.

Now, Bayer is at risk for treble damages based on the contracted value of each and every reimbursement claim made to the government for Baycol even though the government has not suffered any tangible economic loss. This case is one to watch because there is now a split in the circuits on the issue of whether fraud in the inducement, absent economic injury, is actionable, something the Supreme Court may seek to clarify.

Can an employment contract establish a right to employment for life? The Maryland Court of Appeals will take up this question in the case of Spacesaver Systems, Inc. v. Adam.

Under Maryland law, the majority of employees are “at will” employees, meaning they can be terminated at any time and for any reason—other than discrimination on the basis of race, national origin, sex, religion, another legally-protected class, or for a reason that violates Maryland public policy (a very narrow exception)—or no reason at all.

There are some exceptions to the law of at-will employment. The most significant exception to at-will employment is in the case of an employment contract. An employer and employee can contractually agree to terms of employment. For example, the contract can set out a specific length of time that the employment will last, or that the employee may be terminated only for just cause. A contract with these terms gives the employee some legal rights to employment, such that he or she cannot be terminated at the sole discretion of the employer.

The Maryland Court of Appeals has established several principles regarding employment contracts and at-will employment. The Court has said that an employment contract will overcome the presumption of at-will employment if it contains a term establishing the duration of employment.[1] Similarly, if a contract provides that that the employee may be terminated only for just cause, the employee is not “at will.”[2] On the other hand, the Court has suggested that if an employment contract contains no term limiting the duration of employment, it may be terminated at any time and it effectively establishes at-will employment.[3]

The Court will revisit these issues in 2014—and may also consider whether an employment contract can establish a right to lifetime employment—in the case of Spacesaver v. Adam.

The Spacesaver case involves an employment contract between Carla Adam and Spacesaver Systems, Inc. The contract contained no limit on the duration of Adam’s employment, which suggested that she was an at-will employee. The contract also provided, however, that Adam could be terminated only for just cause, and so suggested that she was not an at-will employee. Spacesaver terminated Adam and she sued for breach of contract in the Circuit Court for Montgomery County. Adam asserted that because the contract contained no term limiting the duration of her employment, it amounted to a lifetime employment contract. She argued that—absent just cause for termination—Spacesaver was contractually bound to employ her for life.  The Circuit Court ruled for Adam, finding that there was a lifetime employment contract and that Spacesaver breached the contract by terminating Adam without cause.

On appeal, the Maryland Court of Special Appeals reflected on the unique nature of Adam’s claim to have a lifetime employment contract, stating, “lifetime employment contracts are like exotic, rare birds that have been identified and described in their occasional flights into Maryland, although they have rarely nested in our appellate jurisprudence.”[4]

The Court recognized that an employment contract can, in fact, establish a right to lifetime employment, but “only in very rare circumstances.”[5] In short, for a lifetime employment contract to be enforceable, it must be unmistakably clear from the terms of the contract that the parties intended it to establish employment for life. Although a contract for lifetime employment might at first appear to be a boon for any employee lucky enough to have one, the Court noted that it could be a double-edged sword, preventing the employee from leaving to seek other employment:

Judicial reluctance to find and enforce lifetime contracts stems from the serious consequences of such agreements. Lifetime employment, if binding the employee, may impact his chances of improving his condition, and prevent him from quit[ing] at any time without being liable for breach of contract damages[.][6]

The Court indicated that—because of these serious policy considerations—to be enforceable, a contract for lifetime employment would likely require some “special” consideration in addition to the services of the employee. This could take the form of a substantial benefit to the employer beyond the employee’s services or a substantial hardship to the employee as a result of accepting the employment position.

Ultimately, the Court of Special Appeals concluded that it did not have to decide whether and under what circumstances lifetime employment contracts are enforceable under Maryland law. The Court determined that Adam’s contract with Spacesaver was not a contract for lifetime employment. Instead, it characterized it as a “continuous contract terminable for-cause, rather than a lifetime contract.”[7] The Court explained that, although such a contract does not ensure lifetime employment, it is “continuous” and will remain in effect indefinitely unless the employee is terminated for cause or incompetence.[8] The Court reversed the Circuit Court’s finding of a lifetime contract, but affirmed the Circuit Court’s ruling that Spacesaver breached the contract by terminating Adam without cause.

On October 31, 2013, the Court of Appeals granted certiorarito review the Court of Special Appeals’ decision. Among other things, the Court of Appeals will consider whether there is a distinction between a lifetime employment contract and a “continuous for-cause contract,” and whether a contract of unlimited duration—even one that provides for termination only for cause—nevertheless amounts to an agreement for at-will employment.

The Court of Appeals will likely hear arguments in this case in June 2014, and may issue its ruling before the end of the current term in August 2014.

As a general rule, the states (including Maryland) and the federal government recognize two general categories of working relationships: employer- employee relationships, and independent contractor relationships.  While the majority of persons are employees (and the law presumes as much), employers often miscategorize workers as independent contractors.

Employers do so sometimes unintentionally, but also sometimes intentionally in order to avoid legal requirements such as paying the hourly minimum wage and paying wage taxes.

In recent years, several successful lawsuits have been brought by exotic dancers claiming violations of the federal Fair Labor Standards Act (“FLSA”) and similar state laws.  One such case was brought in Maryland federal court by dancer Ms. Unique Butler against the owner of the Norma Jean Nite Club in Baltimore, Maryland where she danced.[1]  The club provided no compensation to Ms. Butler, but instead allowed her to keep nearly the entirety of her tips.[2]  After her separation from the night club, Ms. Butler sued the company for violation of the FLSA and the Maryland Wage Payment and Collection Law.[3] On November 7, 2013, the Court found as a matter of law that Ms. Butler was an employee as defined by the laws, and not an independent contractor as Defendant argued, making Defendant liable to Ms. Butler for damages.[4]

To determine whether Ms. Butler was Defendant’s employee, the Court applied the well-established “economic reality” factors test.  Those factors include:

1. The degree of control that the supposed employer has over the manner in which the work is performed;
2. The worker’s opportunities for profit or loss dependent on his managerial skill;
3. The worker’s investment in equipment or material, or his employment of other workers;
4. The degree of skill required for the work;
5. The performance of the working relationship; and
6. The degree to which the services rendered are an integral part of the putative employer’s business.[5]

In finding that Defendant exercised a sufficient “degree of control” over Ms. Butler to create an employment relationship, the Court highlighted the following factors: the Defendant’s significant control over the atmosphere of the club, the club’s clientele, and the operation of the club (i.e., advertising, marketing, and managing profits).[6] In light of this, the Court found that the “Defendant exclusively controls the flow of customers, on which Plaintiff depended for her income.” Other factors that different courts have used when analyzing this point include: whether establishments have set behavior guidelines or “codes of conduct” which result in penalties if violated; set prices for lap dances; set work schedules for the dancers; control costume choice; and control music choice.[7]  That Ms. Butler could set her own fee for lap dances, come and go as she pleased, and did not have the “day-to-day aspects” of her performances controlled by the Defendant did not preclude a finding that the Defendant exercised more control over her than she did herself making her economic status “inextricably linked to those conditions over which [Defendant has] complete control.”[8]

In examining the remaining factors, the Court agreed the facts of the case supported the legal conclusion that Ms. Butler was an employee.  The Court noted that none of the dancers at the club, including Ms. Butler, were required to possess skill in order to dance at Norma Jean’s Nite Club.  The lack of skill is indicative of an employment relationship, as independent contractors are generally highly skilled in his or her chosen field.[9]

The Court also found that the services Ms. Butler provided (exotic dancing) was integral to the nature of Defendant’s business as an adult entertainment bar.  Despite the Defendant’s attempt to characterize itself as a “sports bar” and arguing that the existence or non-existence of female exotic dancers was not integral to its business, the Court remarked that “[c]ourts have routinely noted that the presence of exotic dancers are essential, or obviously very important, to the success of a topless nightclub.”[10]

This case is just one in a number of recent wage law suits involving exotic dancers, and it surely will not be the last.  Ms. Butler’s success in her suit does not guarantee that all exotic dancers are “employees” in the eyes of the FLSA, as the existence of an employee-employer relationship must always be determined on a case-by-case basis.  Her victory does, however, demonstrate how important it is that employers correctly categorize workers or face a significant risk of monetary penalties.

As a family law practitioner, there have been numerous occasions when a client or potential new client contacts me and says that they think they have an easy case – that they “have this one in the bag.”  However, slam dunk cases are hard to come by.

Family law, in the State of Maryland, is established by statute (the Maryland Code Annotated, Family Law Article) and case law. And while a specific act, conduct or behavior on the part of one spouse (or opposing party) may appear morally reprehensible or repugnant to the point that you may feel you “have it in the bag”, the Maryland legislature and the judicial system are not always in alignment with that thought.

Take, for instance, the case of pornography addiction and adultery in the context of a custody case.  Dick and Jane have two children.  One evening, while browsing the history on the home computer shared by Dick and Jane, Jane discovers that Dick has been visiting hundreds of pornography websites on a daily basis for the past year.  To add insult to injury, prior to her latest discovery, Dick and Jane were experiencing significant marital difficulties which Jane attributed to the affair that Dick was having with her sister.  Jane is distraught by her discoveries and immediately wants to take steps to end the marriage and feels that based on the combination of Dick’s addiction and his affair, she should easily be able to walk away with sole physical custody of her two minor children – with little or no visitation by Dick.  Do you blame her? What he is doing is morally reprehensible!

From the Court’s perspective, allegations regarding adultery and pornography are a part of their daily docket.  In fact, I would feel comfortable wagering that a majority of the contested cases that are heard by the Court revolve around at least one of these behaviors, if not a combination of the two.

So what does the Court take into account when determining an award of custody? And what weight is given to Dick’s pornography addiction and committing of adultery within the analysis?

The Court’s jurisdiction is based on statute, but the factors that it considers have been refined by the pronouncements of the appellate courts over the years.  Case law has established that custody disputes be resolved by a judge based on a determination of “what is in the child’s best interest.” This is a somewhat amorphous notion and there have been numerous cases in Maryland that have served to define and clarify what this means. (i.e. Montgomery County Dept. of Social Services v. Sanders, 38 Md. App. 406, 381 A.2d 1154 (1977); Taylor v. Taylor, 306 Md. 290, 508 A.2d 964 (1986); and Petrini v. Petrini, 336 Md. 453, 648 A.2d 1016 (1994)).

Pursuant to case law, when a Maryland judge determines who custody should be awarded to, the following factors are to be considered in determining what will be in the bests interests of the child: (1) fitness of the parents; (2) character and reputation of the parties; (3) desire of the natural parents and agreements between the parties; (4) potentiality of maintaining natural family relations; (5) preference of the child; (6) material opportunities affecting the future life of the child; (7) age, health and sex of the child: (8) residences of parents and opportunity for visitation; (9) length of separation from the natural parents: and (10) prior voluntary abandonment or surrender.  However, it is important to note that this is not an exhaustive list and the judge is given broad discretion and can consider any evidence that relates to the child’s physical or emotional well-being.  Furthermore, a custody determination is fact-driven and the judge is required to carefully examine the facts before him or her on a case-by-case basis.

So where does pornography addiction and adultery fit into the Court’s analysis and custody determination?  Both behaviors would fall within the Court’s analysis of the “fitness of the parents” and “character of the parties” but case law has made it clear that the Courts are not permitted to weigh one individual factor more heavily than any other in determining custody.

In fact, in 1977, the Maryland Court of Appeals abolished the presumption that an adulterous parent is unfit.  (Davis v. Davis, 280 Md. 119, 372 A.2d 231 (1977)).  And just because the custodial parent committed adultery does not mean that the scales will tip in favor of the noncustodial parent unless there is a showing that the adulterous relationship has had a detrimental effect on the minor child.  (Swain v. Swain, 43 Md. App. 622, 406 A.2d 680, cert. denied, 286 Md. 754 (1979)).  However, there have been minimal cases in Maryland describing at what level adultery would be considered a detriment to the minor child.  Similarly, there is no presumption that a parent who views or collects pornography is unfit. (Andrews v. Andrews, 242 Md. 143, 218 A.2d 194 (1966)).  Thus, at what level, if any, does a pornography addiction arise to the level of being detrimental to the child?  It is ultimately up to the Court to decide.

The client must also be counseled that the judge who decides their case is a human being, in every essence of the word, and that their decisions are often effected by their human experiences.  Just as all human beings are biased in some manner or another, judges often come into their jobs with biases.  The judge hearing your case may have lost custody of their children or had their access restricted.  They may be paying alimony or had their judicial pension divided.  The judge’s spouse may have committed adultery and they are still hurt by the betrayal.  Or, the judge may be the adulterer and may have completely rationalized their behavior.  They may even have had a close friend or family member who is suffering from the devastation caused by an adulterous spouse.  To think that these experiences do not cloud the lens through which the judge must weigh and consider the factors is shortsighted.

The bottom line is that just because a party behaves in a morally reprehensible manner that does not exclude them from being awarded custody of their child – or winning their case.  Often times, it’s a crapshoot if you go to trial and the client should be aware of this.

Welcome to post number 2 in my primer for the new business owner series. In my last post we discussed doing business as a sole proprietor.  In today’s installment we turn to the limited liability company or LLC.  By a wide margin, LLC’s are the preferred choice of entity for most small business owners.  The benefits of operating as an LLC are numerous and include the following:

1. Limited Liability.  LLC’s provide their owners with the same personal asset protection available to corporate shareholders.
2. No entity level tax.  LLC’s are not taxed as separate entities.  Instead, the income or loss of the LLC’s business is passed through to the owners of the LLC who report it on their tax returns.
3. Flexibility.  Like partnerships, LLCs are contractual in nature.  This provides LLC owners with much greater flexibility when it comes to choosing how to manage the business and share in its profits and losses.
4. Simplicity.  LLCs are not bound by many of the technical requirements associated with operating as a corporation (think organizational minutes, stock certificates, by laws, documenting annual meetings and the like).  Forming an LLC is very simple and requires only the filing of a one page organizational document.

There are of course some potential disadvantages to doing business as an LLC.

1. Employment Taxes.  Employment taxes paid by the active members of an LLC can be higher than those paid by owners of an S corporation.  For this reason, many LLCs make an election to be taxed as an S corporation.
2. Phantom Income.  Owners of an LLC will be taxed on the profits of the LLC even if those profits are not distributed.  This is generally not a problem for the majority owners since they will likely control the timing of distributions of available cash.  Minority owners however should be aware of the possibility that they may be taxed on their share income even if they don’t receive a corresponding distribution of cash.
3. Flexibility.  While the flexibility to structure the management and economics of the business in pretty much any way the owners see fit is a significant benefit of the LLC form of doing business, that flexibility can also get LLC owners into trouble.  Particularly when it comes to their economic deal, complex partnership tax laws could be implicated depending on the specifics of the business deal.

Generally speaking, for the small business owner the advantages of operating as a limited liability company will outweigh the disadvantages, especially for the single owner business.  However, each case is unique and determining whether there are benefits to be gained from operating as an LLC requires a careful review of all of the specific and unique circumstances applicable to the  particular business and its owners.

What was thought by many practitioners and many in the news media to be one of the most significantly restrictive Supreme Court decisions on class actions in recent memory, Wal-Mart Stores, Inc. v. Dukes,[1] may not be so formidable for plaintiffs seeking redress through the class action process.

A limited application of Wal-Mart appears to be a particularly good possibility for those individuals filing in the Mid-Atlantic region covered by the United States Court of Appeals for the Fourth Circuit because of its ruling this week in Scott v. Family Dollar Stores, Inc.[2]  Scott involves fifty-one (51) female managers or former managers at Family Dollar who are claiming sex discrimination.

Like Scott, the Supreme Court’s 2011 Wal-Mart decision concerned the commonality requirement under Rule 23 for class actions and whether it could be satisfied in a sex discrimination case under Title VII.  In Wal-Mart, 1.5 million current and former female employees of Wal-Mart claimed that Wal-Mart’s policy of providing local managers with subjective decision making authority over pay and promotions caused an illegal, disparate impact on its female employees. The plaintiffs also alleged that Wal-Mart’s failure to stop this subjective, discretionary authority was illegal on a class-wide basis.  The Supreme Court rejected the plaintiffs’ claims that a class was present in Wal-Mart.

Many felt that Wal-Mart  sounded the death knell for not only employment class actions but also consumer, antitrust, and any other type of class actions where a defendant or its agents made subjective decisions.  That, in fact, was the position of the District Court in Scott in dismissing the plaintiffs’ case and refusing to allow them to amend their complaint. The district court held that “[t]he Supreme Court made clear in Dukes that, as a matter of law, plaintiffs . . . cannot satisfy the Rule 23(a) commonality requirement . . . as a result of subjective decisions made at the local store levels.” Scott v. Family Dollar Stores, Inc.[3]

In Scott, the Fourth Circuit explicitly rejected this argument and held “Wal-Mart did not set out a per se rule against class certification where subjective decision-making or discretion is alleged.” The Fourth Circuit found that the district court was “clearly erroneous” by not allowing the complaint to be amended and then analyzed under Rule 23. The Fourth Circuit went further and noted that “Wal-Mart is limited to the exercise of discretion by lower-level employees, as opposed to upper-level, top-management personnel,” meaning that subjective decisions by upper-level management could be the basis for a class if tied to a company policy.[4]    “Thus, to satisfy commonality, a plaintiff must demonstrate that the exercise of discretion is tied to a specific employment practice, and that the ‘subjective practice at issue affected the class in a uniform manner.’”[5]    “To expound,” the Fourth Circuit pointed to, among other examples, Family Dollar’s “salary range policy [that] sets mandatory minimum and maximum pay for Store Managers,” but provides “exceptions above the range–granted by the corporate Vice Presidents– [that] are often granted more in favor of men[,]” such that, if the plaintiffs could show this to be true, the commonality requirement could be satisfied.[6]

What this means going forward, at least in the Mid-Atlantic region, is that when “discretionary decisions . . . are made by high-level corporate decision-makers with authority over a broad segment of [a defendant]’s employees,” Wal-Mart is likely not applicable and a class action has the possibility of going forward.[7]