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Ryan Responds: “What should go in your Operating Agreement?”

Ryan Responds trade name vs trademark

What Should go in your Operating Agreement?

In this Ryan Responds video, I go over some of the more important items that an Operating Agreement should cover. While, not an exhaustive list, it is illustrative of the conversations LLC members and managers should have with one another. Business partners should strive to have this organizational document meet their expectations. It is a contract after all.

We also provide a one-sheet if you would like to read more about Operating Agreements. Finally, if you have any questions about reviewing, drafting, or even disputing an operating agreement please contact us or an attorney in your relevant jurisdiction for an initial consultation.

If You have a Question for Future Ryan Responds Videos …

We launched this on a YouTube channel, as we hope to publish educational videos on other topics in the future. Finally, if there is a short question you want the answer to submit them to admin@hewbordenave.com with the Subject line “Ryan Responds”. Please keep your questions short, general, and related to a business topic. Please do not provide specific details of  your matter or attempt to seek direct and specific legal advice through this format. If you need assistance and legal services, then please schedule a consultation with an attorney in your relevant jurisdiction.

Thanks and Cheers!

RKH

Disclaimer: The content of this video is for general information purposes only. Nothing should be taken as legal advice for an individual cases or situations. The viewing of this video does not create an attorney-client relationship. If you need legal advice, please contact an attorney in your relevant jurisdiction.

Can a Landlord Charge a Tenant Extra for a Dog?

Happy Lunar New Year all! It is that time of year again. Like last year, where I covered chickens for Year of the Rooster, and monkeys for Year of the Monkey prior to that, I will be talking about laws related to dogs here in Hawaii. I am not going to cover dog bite law for this post. I think that would be too obvious and simple even though we do personal injury cases at this firm. Further, it probably is best a discussion to have with my litigation partner, Trejur. If you are curious though about the dog bite laws for Hawaii, consider reading the following: 663-9, 663-9.1, 142-74, and 142-75. Those are the most relevant to that subject matter.

Anyway, with regard to this post’s discussion, let’s get to it.

Can a Landlord Charge Extra for a Dog?

Sometimes, I work with landlords who want to review/update their leases or consider forming LLCs for rental properties. When assisting them, they want to know their rights with respect to tenants. As a fellow landlord, I understand you want to be informed when dealing with tenants, especially given the law. A question about Hawaii rent law I get now and then is: “So I have a potential renter, but they have a dog. Can I charge them more?” My lawyer response is: it depends.

The Pet Deposit

Generally, with regard to the landlord’s question, what they can do is ask for more of a deposit. Obviously, their concern is that when tenants have animals they, the landlord, might be stuck with additional cleaning costs and fees after that tenant leaves. Hawaii does allow landlords and property managers to collect an additional security deposit to address this issue.  In the past, the were not able to do so. Prior to November 1, 2013 landlords could only collect a maximum of one (1) month’s rent to cover any damages by the tenant, and that amount included pet damage. So the Hawaii State Legislature amended the law* so that after November 1, 2013, landlords and property managers could collect an additional security deposit on top of that one (1) month’s rent.

Except …

So if you noticed, I said, “It depends.” Why? Well, because you cannot collect this additional security deposit in two instances. One, if the tenant does not have a pet animal that resides in the rental unit. Second, when the pet is an assistance animal that is a reasonable accommodation for a tenant with a disability. Some times dogs are assistance animals for people with disabilities and in those cases the landlord will be unable to collect this additional pet security deposit.

Other Things to Consider

So if you have a potential tenant with a dog, then yes, you can ask them for an additional deposit. This additional deposit is on top of the one (1) month’s rent deposit and can be a condition of the rental agreement. However, if that dog is an assistance animal, then you are prohibited. Even if you can extract this additional pet security deposit, as a landlord, you may wish to consider other aspects of allowing dogs into your rental units. For example, if it is a condo situation and you as the owner are a part of a condo association are you violating the house rules? Or in general, consider your insurance policy, does it cover pet allowances in your rental units? Along this insurance questioning, remember not all dog breeds are the same, and you as the landlord may be liable for injuries due to the animal. The costs and damages associated  with the animal may exceed your deposits. So best to be thoughtful in your consideration and plan ahead.

Random Facts

*Interesting fact, I worked for the Hawaii State Legislature during the year the law was amended and a part of the drafting process. If you want to read the law, please click here. Another interesting fact, I’ve had six dogs throughout my life time. So I’ve definitely seen this law from a variety of points of view.

Thanks for reading and have a Happy Lunar New Year celebrating the Year of the Dog!  新年快乐!

-RKH

DISCLAIMER: This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in this post without seeking the advice of  an attorney in their relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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Honoring Fred Korematsu Day

I’d like to share some of my views on Fred Korematsu Day of Civil Liberties and the Constitution. California created this special day, held every January 30, posthumously for Fred T. Korematsu. It is also celebrated in Hawaii and a number of other states. The Day commemorates Fred Korematsu’s birthday and his contributions as a Japanese American civil rights activist. It recognizes his contributions in fighting the injustice of Japanese interment during World War II, but in general recognizing civil liberties under the U.S. Constitution.

Manzanar War Relocation Center, California was the internment camp for Japanese Americans during World War 2.

Background and Context

In Korematsu v. United States, 323 U.S. 214 (1944), the Supreme Court sided with the U.S. government in upholding Executive Order 9066. An order that forced Japanese Americans into internment camps during World War II regardless of citizenship. The Korematsu case decision showed how deeply ingrained racism was and still is in our government and society. Racial profiling and the stripping of citizens of their civil liberties is not gone from the American experience. This conversation is still going on as we can see in today’s politics and news.

For example, author Lily Rothman poignantly observes in her Time’s article that knowing the history of Japanese internment matters a great deal. While the internment of Japanese Americans took place nearly 80 years ago, the themes of racial exclusion and stigma still linger today.

Therefore, I think I should share some of my views on this matter so you can understand the value’s of the firm and the kind of law that we practice.

This is a monument to Japanese interred at Manazar.

 

Words of Ryan K. Hew

I am sure people are wondering what impact does Fred Korematsu day have to do with a business attorney. Isn’t business law all about contracts or stymieing people’s rights in transactions?  I would probably respond that: (a) that nearly 90% of businesses in the U.S. are small businesses (20 workers or less); and (b) the government tramples the rights of the business owners as it did with the Japanese Americans during internment.  Japanese American business owners were forced out of business and into the camps. Nowadays, many immigrant business owners fear the law or lack access to legal assistance.

None of this is new, making Fred Korematsu Day an important symbol to remember and continue his legacy. I was a history major during my undergraduate days and even prior to the events of World War II and the unjust internment of Japanese Americans I learned about the Chinese Exclusion Act of 1882. This was one of the first major pieces of U.S. law to restrict immigration. Similar to today’s arguments on immigration, the Act was born out of fear of Chinese workers. Fears of them causing unemployment, depressing wages, and bringing other problems due to their ethnicity. The law acted to effectively ban Chinese immigration into the United States and prevent them from becoming U.S. citizens.  For me, this other dark piece of history is no different than the Japanese internment. It represents laws based on fear and bias.

Japanese Americas were forced to close their businesses and relocated to the internment camps.

My Personal History and Connection to What I Do

For me, reading about this history from as an undergraduate to a law student, did have personal relevance. My mother always told me stories of how my grandfather owned a popular shop in Chinatown Honolulu. However, unfortunately cancer took him at an early age. Soon after, my widowed grandmother was exploited due to her lack of English and inability to understand the law. Eventually she lost the business and much more due to the loss of income. To me the U.S. government forcing Japanese Americans from their homes and businesses was no different. Both scenarios arose out of the lack of justice and exploitation of the law. This is why I launched my own practice, why I enjoy educating small business owners with a variety of backgrounds on their business rights, and why I do pro bono with the Business Law Corps, whose motto is lawyers for economic justice, at the Patsy T. Mink Center for Business and Leadership.  The fight for civil liberties also means giving people fair chance at starting and owning their own business.

Final Words

I would like to extend my appreciation and thanks to Fred T. Korematsu and the Fred T. Korematsu Institute for continuing his legacy. At the firm I’m with, we fight for individual rights, economic justice, and civil liberties in our own way. Fred Korematsu Day highlights the need for us to remember and educate. Thank you for reading this post.

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Ryan Responds: “Do I Need to Form a Business (Entity)?”

Ryan Responds trade name vs trademark

Ryan Responds Video on “Do I Need to Form a Business (Entity)?”

One of my New Year resolutions was to finally start doing short informative videos on various aspects of business law. Many social media consultant and other small practice firm friends urged me to do this, as I already do educational seminars for business owners. If you are in Honolulu on January 31st, you can come attend one.

So the “Ryan Responds” videos are meant to be a quick reply to people’s FAQs about business law. They are not specific in-depth advice. So they are not a replacement for consultation time directly with an attorney. Rather they are meant to bite-sized and approachable for people that have general questions.

If You have a Question for Future Ryan Responds Videos …

We launched this on a YouTube channel, as we hope to publish educational videos on other topics in the future. Finally, if there is a short question you want the answer to submit them to admin@hewbordenave.com with the Subject line “Ryan Responds”. Please keep your questions short, general, and related to a business topic. Please do not provide specific details of  your matter or attempt to seek direct and specific legal advice through this format. If you need assistance and legal services, then please schedule a consultation with an attorney in your relevant jurisdiction.

Thanks and Cheers!

RKH

Disclaimer: The content of this video is for general information purposes only. Nothing should be taken as legal advice for an individual cases or situations. The viewing of this video does not create an attorney-client relationship. If you need legal advice, please contact an attorney in your relevant jurisdiction.

Are You Prepared? Disaster Planning (for Hawaii)

UPDATE (2018/01/15): Included a PDF for the Hawaii State Department of Defense below.

Did You Know How to Respond to the Missile Threat?

We are glad that everyone is safe and that the emergency alert about a ballistic missile threat to Hawaii on January 13, 2018, which people received on their mobile devices and saw flash across their tv screens was just a mistake. However, seeing social media reactions as the situation unfolded it seems apparent we all could be better prepared. We hope that we never have to act on disaster plans, but wherever you live you could always take better steps to safeguard yourself, your family and friends, and your businesses and organizations.

Do you know what to do if you see this on your mobile device or tv?

I was fortunate enough to attend a Hawaii Society of Business Professional’s luncheon last fall that covered the topic of the threat from North Korea and what people and businesses should do to prepare. So I felt a little better prepared compared to the confusion I saw on social media this morning. However, faced with the reality I did ask myself, did I take all t he precautions I could?  Maybe, but also maybe not. While we should ask questions of our officials about how a mistake like this happened, this presents us all an opportunity. An opportunity for us to better prepare for emergencies.

Hawaii’s Emergency Management Agency

To that end I would like to direct your attention to the State of Hawaii’s Emergency Management Agency’s website. On it you will find a Get Ready section that has resources to help you prepare your family, your home, and your business. Those are resources for you to review in general for getting prepared for disaster in general. If you have concerns about the Nuclear Threat, the agency has a specific section dedicated to that here. Further, there is a FAQ and if you still have questions you can submit them to the agency for review and response.

Thank goodness there was no actual threat. However, it may be an opportunity to be prepared for disasters.

Additionally, Hawaii State Department of Defense and the Hawaii Emergency Management Agency provided a Guidance Summary for Coordinated Public Messaging that gives critical information for the Immediate Actions you should take in case of a nuclear detonation.

 

It was last revised on June 27, 2017. Direct link to PDF.

Planning Requires asking Questions

As you go through some of the resources, you will realize while there are a lot of practical steps, such as putting together an emergency kit by getting food, water, and medical supplies, a lot of planning is asking questions. Planning is that, whether it be strategic business planning or estate planning, we need to ask a lot of questions to get us to think of what we should do in a particular situation. Disaster planning is not any different: Do you have everything that you need for an emergency? Does everyone in your family know what to do in emergency? What if you are at home? What if you are at work?  And so forth …

On the one hand, we spend a lot of time planning for risk mitigation with clients, so we get it. It is sometimes hard putting in that mental time for thinking about the future. However, our firm’s other services include being a resource for clients and their businesses in going after claims for their injuries they’ve suffered in a disaster or asking for a release of obligation under a contract under a Force Majuere (Act of God) clause the reality is that work comes after. Bottom line is that your goal should be to keep yourself, family, business and community safe. So please consider steps to plan and prepare. Stay safe!

DISCLAIMER: This post provides general information, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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Recap: Horrors of Business Ownership Part I

Horror Stories of Owning a Business and How to Deal with Them

The seminar focused on stressful situations encountered by business owners and how to deal with them.

Horror Stories of Business Ownership: Recap of Seminar

How is the beginning of your November 2017 going? Are you scared there are only 2 months left till the end of the year? Well, speaking of frights, I did a seminar with the Better Business Bureau of Hawaii (BBB) this past Monday celebrating Hallloween. We told spooky stories, well sort of. We discussed the horrors of business ownership. Specifically, I talked about these broader topics:

  1. structure of entity – failing to plan properly;
  2. disputes with business partners and managers;
  3. government regulations – the revoking of permits and licenses; and
  4. intellectual property infringement.

Lisa Nakao,Director of Operations of the BBB, discussed the resources the BBB offers and how to deal with reviews and complaints by customers hosted on the BBB’s website (I will cover some of this in a Part II to this post). If you could not make it to this seminar do not worry. I will continue presenting seminars aimed at educating business owners about the legal issues. So be sure to check back and follow us.

Some of the Horrors of Owning a Business – Highlights

I’d like to take this time to discuss some highlights of the seminar. While, I will not cover everything from the seminar, as you will  just have to come to the next one, this post will touch upon a couple of issues. Particularly the ones that gave good discussion or attendees asked a lot of questions.

1. Managerial Authority in a LLC: Friends, Family Members, and/or Relatives of Friends as Your Manager

I’ve discussed in the past of business partner disputes, but this following scenario is derived on a similar theme. Consider the situation where many small and medium-sized business owners rely on family or friends to help run their business, including relatives of friends. This tight-knit network can be a boon or a misfortune. Especially, here in Hawaii where people tend to rely on local connections the trust and reliance can run high and sometimes too quickly. Specifically, I refer to hiring someone as a manager of your LLC or corporation and giving them access to the company’s bank account and credit cards. Then the business owner discovers the person they thought they could trust is gone the business account is empty and the credit cards are over extended. Worst yet, there is no written management agreement.

Don't lose your business account.

Be careful of giving your manager too much access to your finances.

Is there Nothing that Can be Done? 

While, legally there is a lot to do, such as suing them or attempting to report them to the police for theft – the reality is proof and evidence issues. Many times business owners in this situation rely on a handshake, only talk to their manager on the phone, and their emails and texts refer to managerial duties/obligations obliquely. There is no writing of the contract. Further, consider even if you have a good case, you have to find them and force them to give back the money, which by the time you get the the lawsuit filed, served, and litigated, they’ve probably spent it.

So again, this is an urging to slow it down and think methodically. I get it. Small business owners are trying to get help and tread water. However, consider the following ideas:

  1. conduct due diligence – find out more about them before you hire them;
  2. limit their access to the business bank account and credit cards – you do not need to give them unfettered access;
  3. if you cannot do a full-blown management agreement, then at least tackle the main terms in some of memorandum, letter, or lengthy email;
  4. as to point 3 make sure you get their signature, acknowledgment, and confirmation!

While, those things will not always save you, the point is getting you into the habit of preparing, doing your research, and record keeping when you finally decide to take an action that may be risky.

2. Shutting Down Business Operations Due to Lost of License or Permit

So I told a story during the seminar of a business owner who relied on their accountant to do the business entity’s Annual Filings with the State of Hawaii’s Department of Commerce Affairs (DCCA). Only problem with that was the accountant was not actually doing the filings; it was not a part of their services. So the DCCA administratively terminated the corporation’s existence. So leaving the account and taxation issues aside, the main focus of this section I want to focus on is government licensing and permitting. See LLCs and corporations are legal persons. They may not be a living, breathing individual like you and me, but they are persons under the law. So often time government licenses and permits, for example liquor licenses, issues to the business entity itself and not the individual owners of the business.

So when the DCCA administratively terminated this corporation the business owner also lost their government license. In this instance, they could not operate the business because it would be illegal to operate without a license. So they had to shutter their business and form a new corporation, then reapply for a completely new government license.

Did they Really have to Close Their Business?

Yes, unfortunately in this case they did. However, sometimes the government fails to follow proper procedure when revoking or suspending a business owner’s license or permit. If the government does not follow its own rules and regulations there may be opportunity to stop the government’s action. However, it depends on the type of permit or license being revoked and the applicable laws and regulations surrounding it.  In this instance, the business owner could have saved themselves by routinely checking the DCCA and communicating with their accountant. Finally, catching the administrative termination of their original corporation earlier could’ve resulted in a successful petition to reinstate it.

You should know the filings you need to make with the government and calendar them into your schedule. Further, consider an annual business checkup to assist you in navigating your business’s compliance requirements. If you are interested in an initial consult to begin the process of an annual business checkup contact us today!

Be vigilant in your compliance.

Keep your business compliant or you may be forced to shut it down by the government.

There will be a Part II to this post; it will focus on the BBB Reports and Complaints and resources/information they shared. So check back!

DISCLAIMER: This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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High Profile Sexual Abuse Allegations Tied to a Longstanding Reality

Opening door.

Opening door.

Sexual Abuse Suits: A Change in Society or Exposing Institutional Problems?

Recently, there have been high profile sexual abuse lawsuits making headlines across the nation. In light of this, people often ask, “Is something happening to our society causing this increase in harm to children?” Based on statistical analysis it would seem it is more of an unmasking of longstanding problems.

For instance, in 2016, lawsuits were brought against MJJ Productions, a multimedia creation and distribution company founded by the late singer Michael Jackson. One lawsuit accuses MJJ Productions of negligence in the handling of sexual abuse allegations. While it is impossible to predict the outcome of pending litigation, the available evidence and allegations of “businesses [designed] to operate as a child sexual abuse operation, specifically designed to locate, attract, lure and seduce child sexual abuse victims” are disturbing at the very least.

More recently, lawsuits were filed against several prominent members of United States Gymnastics, as well as the governing body itself. The lawsuits allege negligence on the part of the USA Gymnastics. Specifically, it had a pattern of harboring, concealing, and promoting abusive behavior; this is in addition to other claims of action against the athletic organization. The civil action centers around the criminal prosecution of USA Gymnastics’ former team doctor, Dr. Lawrence Nassar.  He faces over 100 complaints of sexual abuse and sexual assault from the athletes that were under his care. According to one complaint, the USA Gymnastics failed to take measures to adequately protect its young athletes from him. The reason: they chose to handle the sexual abuse allegations against the doctor internally, rather than reporting these potential crimes to the appropriate authorities.

The Statistics Show that this is Not a New Problem

These headline cases should motivate people to be more sensitive and handle situations properly. Those in authority sometimes fail to properly react. They can often mismanage or mishandle reported abuse. All jurisdictions mandate reporting of potential sexual abuse of a minor to the proper authorities. The goal being to prevent persons and organizations from covering up the problem.

No one should sweep abusive conduct out of the public eye. Criminal prosecutions might initially stop a perpetrator, and civil cases might deter organizations, but public admonitions, settlements, and convictions make communities safer. This is unlike what happens when childhood sexual abuse remains hidden behind a veil of shame and secrecy.

While, headline cases might shake our belief in the people and organizations we trust, the unfortunate reality is this behavior has persisted. It lurks beneath the surface and research confirms as much. According to the National Center For Victims of Crime, 1 in 5 girls and 1 in 20 boys will be a victim of child sexual abuse. If that is not sobering, consider the further following statistics:

Reporting Sometimes Not Enough

Further sobering statistics highlight the realities of this problem. First, reporting the suspected abuse may not be enough. Even if holding perpetrators responsible, but not the those responsible for victims’ safety, may ultimately hide the problem. Those in power may know about patterns of abuse, but do nothing about it, or worst, turn a blind eye. News stories, reports, and studies bring light to an ongoing situation. However, the unfortunate reality is that the news does not cover less sensational stories, even while these victims’ pain is just as real.

Further Information

For more information on the cases discussed in this post you can visit:

  1. the Hollywood Reporter for updates on the MJJ Productions case; and
  2. the L.A. Times for the USA Gymnastics case.

If you or someone you know is a victim of sexual abuse, please seek help. You are not alone in this situation; there are people and organizations that can help. In Hawaii, there is the Sexual Abuse Treatment Center. For California, there are variety of resources, not only for sexual abuse victims, but many other kinds of problems, consider the California Victim Compensation Board’s Victim Resources page.

Lastly, if you are seeking legal representation to handle your matter, or a loved one’s matter, with diligence and compassion, please consider contacting Hew and Bordenave.  We assist clients both in Hawaii and California and diligently protect the identities of our clients.

DISCLAIMER: This post contains comments and opinions of cases in the news as well as factual data.  It does not constitute as legal advice to any particular person in any respect.  If the reader feels they have an injury or need specific advice based on the information contained in this post, then they should seek the advice of  an attorney in their relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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Part II, Communicating with Unpleasantness: Demand Letters

Demand letter.
Demand letter.

Demand letters are usually the start of unpleasant communications. Not the end.

What are Demand Letters for?

Usually, it is a demand on the other party take some corrective action or to stop doing something. It could be demanding payment because it is late. It could be demanding interest on top of the principal due to the lateness of the payment. Other times, if you are the customer and the service provider’s job remains undone, then you want specific performance. You are asking them to finish the job.

What about Cease and Desist Letters?

These letters are demanding that the other party stop doing something, such as Intellectual Property matters. Specifically, there is an infringing action that going on or about to happen and the owner of the IP wants the infringer informed of their rights. It could be an infringer’s use of an unauthorized copy of an image on their website and social media.

Sometimes the government uses cease and desist letters as a part of their enforcement powers. Agencies will indicate to the person that they are doing some type of illegal activity that should stop immediately. If not, and they ignore the notice of the letter, then they could face penalties, fines, or being charged with a crime.

Does it Need to be Drafted by an Attorney?

No. Attorneys don’t always draft them, but having them may help. You should consider the nature and context of the dispute. For instance, demanding a customer pay you $200.00 for kitchen supplies because the are past the due date might not be a good use of an attorney. However, if your client is not paying you $200,000.00 in consulting and construction fees and you have an obligation to continue working on the project, then are a lot of factors to take into consideration when making the demand.

Insurance Claims

Trejur will likely provide posts in the future that are more in-depth on this topic. However, for the discussion purposes of this post just know that for personal injury claims, the injured person usually starts the process by submitting a demand letter to the insurance companies. Further consider that negotiating and settling insurance claims may be aided by a lawyer’s counsel. The reason is there are certain structures and contents that go with the initial demand letter.

Examples include: describing the accident, medical treatments to treat the injured, and accompanying evidence and supplemental documents, such as police reports and medical bills. The initial demand letter is probably just the start; insurance companies tend to lowball their initial offer. A personal injury attorney’s knowledge and experience may assist in getting a higher settlement when communicating to the insurance companies.

What Goes into Demand Letters?

It depends. Every situation is unique. This includes drafting a demand letter for clients. Sometimes, short and sweet is perfect because the facts are simple, and the law is easy to understand. Other times, lengthy explanations are necessary. Such as when the legal rights and concepts are abstract. These include citing to the actual law, explaining case law, and providing some evidence to show the other side there is a provable case. At a minimum, a demand letter usually explains the situation, a view of the law that is favorable to the demanding party, and the demands. Money and/or taking an action (or stopping one) and deadlines to respond or comply.  Finally, consider lawyers communicate to other attorneys via these demand letters as well as laypeople, so they legal ethics applies.

I will say from an attorney’s perspective we, just as much as laypeople, enjoy creative demand letters. Demand letters don’t always have to be mean in tone. “Nastygrams” are not always effective. Consider many content providers realize that fans who are business owners flatter them through creative endeavors, but these actions may infringe on their copyright, trademark, and trade dress rights.

However, sometimes you do get a mean and unreasonable demand letter. The question then becomes how do you respond? Ridiculous cease and desist letters sometimes also open themselves to cheeky responses like this one.

Other than the Creative Way, How Should I Respond to One?

The opportunity to dare the writer of the demand letter to start a lawsuit by offering lollipops to the process server is not a frequent one. However, a lot of people feel that ignoring a demand letter is a reasonable response. It might not be, as sometimes silence may be viewed as an admission. The demanding party may just send another letter.

A strongly worded response letter may be able to dissuade the other side. Attorneys frequently engage in letter writing contests back-and-forth without even filing a claim because litigation can increase the costs dramatically. The hope is there is a resolution at some point, but a demand letter is not usually the end of the legal process. It starts a communication process.  So how you choose to respond sometimes requires a careful analysis of all factors:

  • What are the demands? What does it cost to comply with the demands?
  • Do you have any rights or claims?
  • What are the facts?  Are they verifiable?
  • How much would it cost to litigate? Take it through trial?
  • What are you willing to settle for?

Analyzing these factors sometimes helps clients make valuation decisions, especially for business owners. Sometimes it might be worth it to settle, other times not. The key is to understand the contents of the demand letter, and then the circumstances that surround it. It is the start of a communication process, not the end.

DISCLAIMER: This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in this post without seeking the advice of  an attorney in their relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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Business Partners Should Talk About Breaking Up First

Handshake between business partners.

Talk about your business relationship, reduce it to a written agreement, sign it, then get to work with your partner.

When assisting business partners form their entities or when my litigation partner is consulting with me on a case I see the following scenario often:

A business partnership starts with a money person and an idea person. The idea person has a fantastic business plan and the money person has the cash. They think it is perfect. They rush to form a LLC or corporation, downloading an Operating Agreement or Bylaws from the Internet. It even might be worst, they do not even bother with a document. After that, they are running their business, but then several months into it they are fighting.

What do Business Partners Fight About?

Usually, they do not see eye-to-eye on major business decisions.  Decisions like:

  1. how much money should each person contribute;
  2. who has the authority to sign checks or what is the dollar limit each partner has for contract obligations;
  3. where should we locate our offices;
  4. when do we pay ourselves;
  5. what happens when one of us wants to leave; and
  6. so many other issues …

Business owners hate hearing this from their attorneys: slow down! They should be deliberative in their collaboration with their business partner. I sometimes remind people that getting a business partner is basically getting married. Also partnering with a friend is different than being a friend, you sometimes do not know their work ethic. This is why we urge business owners to get things in writing with their partners.

The goal when drafting Operating Agreements, Bylaws, and employment agreements* should be what are the processes that governs decision-making, what happens when there is disagreement, or if an owner wants to leave, etc. … Basically, preempt the fights by setting up contractual arrangements. *By the way, if an owner of a business wants to contribute work instead of capital, then the partners should consider an employment agreement. It is solely not just for contract law purposes, but for tax and accounting issues.

Business partners think that their idea will be a money-maker and that their partner is going to make it happen.  They fail to calculate that even in success that their business partner may have other ideas on the direction of the business.  There is nothing wrong with differences of opinion, but when decision-making is paralyzed it could stop the business from moving forward. Further, for its employees, vendors, and service-providers, knowledge of an ongoing dispute amongst the business owners can make them question the survivability of the business.

Protect your Business Relationship by Communicating

It is easy. Talk about it, come to an agreement, and then get it in writing before the business starts. Many people just want us attorneys to give them their documents or download their own forms for the Internet. They think it saves them time and money.  I’d contend that is the wrong way to look at it. The time and money spent on your governing documents is an investment in the relationship. They are a contractual foundation.

If not, you are just pushing disputes to a later date. Consider that when the money has been spent, you’ve worked countless days and nights, and now you are arguing.  Then you realize all you have for your contract rights is a poorly drafted document … or worst yet, you don’t have one at all.  So do yourself a favor, have the conversation now and plan for the future.  Communicating when you are on good terms with a partner is easier, then when you are fighting.

DISCLAIMER: This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in the post without seeking the advice of  an attorney in the relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

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Can You Keep Chickens in Your Backyard?

Chinese Rooster

I’m sure you’ve seen the odd chicken or two crossing Honolulu’s roads!

Happy Lunar New Year All!

If you’ve been following me, you may recall I did a blog post on my old website (also found here) celebrating last Lunar New Year’s animal, the monkey. It was a post about “Can You Own a Monkey in Hawaii?” Keeping with that theme this post discusses the laws of the City and County of Honolulu related to this Lunar New Year’s animal, the Rooster. Or more precisely, chickens.

Can You Keep Chickens?

This post is limits discussion to the jurisdiction of the City and County of Honolulu (the island of Oahu).  Additionally, the post focuses on residential areas only. If you are raising chickens for commercial purposes you have compliance issues regarding zoning and permitting, which is a different discussion then today’s post.

Nuisance Law

When keeping chickens, the law is not related to the animal itself, but more has to do with the City government’s ability to regulate nuisances. Old English common law had it that when some type of action by a defendant was either causing a substantial and unreasonable interference with people’s use and enjoyment of the land (private nuisance) or the action had a materially affect the reasonable comfort and convenience of life of the people (public nuisance). Flash forward to today, our city government has the ability to regulate nuisances, in our case for this post, Animal Nuisances. You can find it in Chapter 7, Article 2 of the Revised Ordinances of Honolulu.

So the laws approach to the situation is to make it unlawful to own poultry, which includes chickens, pigeons, turkeys, geese, ducks and peafowl so long as they are an “animal nuisance”.  See Sec. 7-2.3.

Short answer: yes, you can keep chickens if you are in Honolulu.

Slightly longer answer: yes, you can keep chickens in Honolulu, so long as they are not a nuisance. If they are a nuisance, then you cannot keep them.

So What’s an “Animal Nuisance”?

Article 2 also defines “animal nuisance.” There are three (3) definitions, but I’m going to focus on the first two definitions which is:

  • Makes noise continuously and/or incessantly for a period of 10 minutes or intermittently for one-half hour or more to the disturbance of any person at any time of day or night and regardless of whether the animal, farm animal or poultry is physically situated in or upon private property;
  • Barks, whines, howls, crows, cries or makes any other unreasonable noise as described in Section 7-2.4 (c) of this article;

See Sec. 7-2.2.

So it is clear that a chicken making noise continuously for 10 minutes or intermittently over one-half hour (30 minutes) is a nuisance, but what is that second definition about?

Again, we are now defining another concept, which is what constitutes “unreasonable noise”. Sec. 7-2.4(c) says that:

Noise is unreasonable within the meaning of this article if considering the nature and the circumstances surrounding the animal nuisance, including the nature of the location and the time of the day or night, it interferes with reasonable individual or group activities such as, but not limited to, communication, work, rest, recreation or sleep; or the failure to heed the admonition of a police officer or a special officer of the animal control contractor that the noise is unreasonable and should be stopped or reduced.

What does this Mean for an Owner of a Rooster that cock-a-doodle-doos at 11:00 p.m. in an Apartment Building?

If we consider the nature and the circumstances: (a) it is a building where everyone is close by; (b) the rooster’s noise is at night; and (c) that most people are sleeping at that time; and (d) that the neighbors would likely call the police or animal control personnel. Then the likely outcome is those officials would instruct the owner to have the animal stop. If the owner did not stop the problem, then it would be deemed as “unreasonable noise.” See Sec. 7-2.4. This turns into an “animal nuisance” and then the owner would be prohibited from keeping the rooster.

What Could Happen if you Violate the Law?

Generally, a monetary fine. If you keep stacking offenses within a certain time frame you actually be imprisoned. Additionally, you can be ordered to go to a training program or retain a contractor to help you train the animal to stop the nuisance. Further, such training programs or contractors are paid for by you. See Sec. 7-2.10

How Many Chickens can I Have?

Sec. 7-2.5(d) states that for chickens and peafowl: “The number of chickens or peafowl shall not exceed two per household.”

So yes, while you can keep a couple of chickens in Honolulu residential areas, they better be quiet chickens!

How do I Handle Chicken Noises Bothering Me?

If you have an animal noise complaint for Oahu, then contact the Honolulu Police Department or the Hawaiian Humane Society. The Hawaiian Humane Society recently has started responding to chicken noise complaints: http://www.kitv.com/story/34311091/hawaiian-humane-society-now-responding-to-chicken-noise-complaints

If you want to find more about Honolulu’s Animal Nuisance law, click here.

Thanks again for stopping by and I hope this is a fortuitous and good year for you!

-RKH

DISCLAIMER: This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in this post without seeking the advice of  an attorney in their relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.