Author: Hoffman & Forde

Why You Should Hire an Attorney for Your Business

Business Attorney meeting

Small businesses go through many changes as they develop and grow. A company that starts out as just one person and an idea can become an organization with hundreds of employees and multiple locations. A business’ growth is invariably accompanied by greater responsibilities and—for better or worse—greater legal burdens. What’s more, creating a strong business foundation requires making smart legal decisions early on. Here’s why you should hire an attorney for your business.

Incorporation and Other Foundational Documents

The legal form of your business (e.g., a partnership, LLC, or corporation) matters and can have far-reaching effects. Therefore, choosing the right structure and drafting the foundational documents is best with the help of a business attorney.

This applies to incorporations in particular. The process of creating a corporation is more complicated than some realize and may require making fundamental changes to the way you operate. It’s also difficult to undo, so you should fully understand the advantages (such as asset protection) and disadvantages (increased tax burden, for example) before you begin.

Avoiding Lawsuits

It’s understandable that business owners might resist hiring an attorney in order to keep expenses down, but many will come to rue that decision when they become tangled up in an entirely avoidable lawsuit. You can’t be expected to know the legal ramifications of every business decision. A quick “I’d like to run something by you” conversation with your lawyer can save you untold amounts of misery.

It is also often the case that merely having a lawyer can prevent a conflict from escalating. For example, if someone threatens to sue you, either verbally or in writing, forwarding all future communications to your lawyer can have the effect that the person simply goes away.

Workplace Issues

Though this point could be filed under “avoiding lawsuits,” workplace legal issues are prominent enough to warrant a special callout. The modern workplace is highly regulated. Everything from workers’ compensation to harassment claims should be handled with care. Terminating an employee can easily backfire. Having predefined processes in place can help greatly, and a call to your lawyer when in doubt is usually a good idea.

Compliance

From health plans to personal data collection, many aspects of your business activities are regulated by state and federal law. Operating your business out of compliance can land you in hot water and perhaps imperil your business’ future. Even if there are some compliance areas that you can handle, it’s liable to drain you of your time. Handing these issues over to someone whose job it is to understand them helps ensure that it’s done right and frees you up to focus on your business.

Find Out How Our Attorneys Can Help

Every business is different. Our business specialists can help pinpoint your needs and create a customized plan for moving forward, whether it’s a one-time service or an ongoing relationship. Contact our office today to get started.

Estate Planning Checklist: What You Should Know

Estate planning meeting

Everyone should have an estate plan—we are have at least some possessions to pass on—yet most people will put off creating an estate plan as long as possible. It’s easy to understand why, but the fact is that while it’s never too early to make an estate plan, someday, it will be too late.  If you’re reading this, the issue is already on your mind. So here’s a must-have estate planning checklist to help you get started.

1. Make an Inventory of Your Assets

The first step in any estate plan is determining what makes up your estate. Once you sit down and start making a list, you may be surprised by how many assets you have: your home, furniture, vehicles, collectibles, insurance policy, etc. So don’t worry if you can’t create a comprehensive list on the first go; think of it as a working document you can add to as new things occur.

Take special care to identify property that other people might not know. For example, cryptocurrency can easily be lost when a USB drive is tossed into the trash. Include information on where these assets are located, passwords, etc.

2. Decide Where Your Property Should Go

Once you know what your estate consists of, think about who you’d like to receive that property after you’re gone. For some people, it is simple; they want their surviving spouse to be their sole beneficiary or have the estate liquidated and divided equally among their children. Others may wish for a specific property to go to certain people or to give money to a charity.

It would also be beneficial to start thinking about how you want to transfer the property or plan for specific scenarios at this stage. For example, if you have minor children, consider what will happen if you die before or after they reach adulthood. Or perhaps your spouse is not the biological parent of your children, and you want them to have continued use of your home during their lifetime and then pass it to your children.

 3. Consider What Happens If You’re Incapacitated

If you are incapacitated, someone will likely need to make decisions on your behalf. For example, if you are severely injured in a car accident, someone may have to make financial decisions for you or even decide whether to continue life support. Thinking about these scenarios in advance can relieve the burden on your loved ones and ensure your wishes are respected.

4. Draft the Documents

After having defined your estate and decided what to do with it, it’s time to create the necessary documents. A wide variety of legal instruments are available to accomplish virtually any estate planning goal. For some, this may consist only of a simple will and perhaps a medical directive. Others may require more complicated measures, such as setting up a trust. You may already have some assets, such as insurance policies or retirement plans with named beneficiaries; verify that those beneficiaries match your current wishes.

At this stage you should also consider who you would like to be appointed as executor of your estate. This person will have a lot of responsibility—e.g., selling your property to distribute the proceeds—so choose someone you trust who is up to the task. A judge will decide who to appoint if you don’t name an executor.

5. Review Your Plan Regularly

An estate plan created when you were 30 years old may not be sufficient when you are 50. Periodically revisit your estate plan to see if your inventory of assets is up to date or if you need to change your beneficiaries. This is especially important after significant life changes, such as divorce.

Before You Begin, Speak to an Attorney

Estate planning is about peace of mind. You want to know that your loved ones are taken care of and that your property goes where it should. However, doing it on your own presents risks because if the documents are not prepared correctly, they may be challenged in court. Also, you may miss out on simple ways to minimize your estate’s tax liability.

Talking to one of our experienced estate attorneys will simplify the entire process and ease your mind. We can help you evaluate your estate and create a comprehensive plan that covers your needs. Contact our office to set up an appointment.

What You Should Know Before Filing for Bankruptcy

filing for bankruptcy

When debt piles up beyond what you can manage, it can feel like drowning. You receive a constant flood of letters and phone calls from collectors, and the compounding interest takes on a life of its own. For people in this situation, declaring bankruptcy can be an attractive option. It wipes out many, if not all, of your debts and allows you a fresh start. 

However, bankruptcy is not to be taken lightly and is a complicated process. Here is what you should know before filing for bankruptcy.

Two Types of Bankruptcy

The first thing to be aware of before filing for bankruptcy is that there are two primary types of bankruptcy for individuals: Chapter 7 and Chapter 13. Chapter 7, also called liquidation bankruptcy, is the more common type. The debtor’s “non-exempt” assets are sold off, and creditors receive the proceeds; after this, the debts are canceled. California, in particular, has generous exemptions regarding the types of property that must be sold, allowing people to keep more of their essential property. However, there is a means test for Chapter 7 bankruptcy, preventing it from being used by high-wage earners.

Under Chapter 13 bankruptcy, debt is reorganized, and the debtor must follow a pre-approved repayment plan over three to five years. After completing this plan, the debts are considered satisfied. Chapter 13 is more appropriate for people with a steady income.

Not All Debt Is Canceled by Bankruptcy

People may get the wrong idea that any debt is wiped out by filing for bankruptcy, but that is not the case. Bankruptcy can only eliminate “unsecured” debt, such as credit card debt and medical bills. A debt is secured when it is backed by collateral, as is the case with home and car loans. Creditors of secured debt may still seek to repossess the collateral assets. Also, student loans are not covered by bankruptcy.

Hiding Assets or Going on a Spending Spree Can Get You in Trouble

When people know they will file for bankruptcy, they sometimes convey their assets to others to keep them from being liquidated. They may also go on a big spending spree, thinking the new debt will be canceled, so it’s free money. Both behaviors are considered fraud and can get you in legal trouble. Creditors can also object to recent debt, which will keep you from getting the clean slate you need.

Bankruptcy Is Not Fast or Free

Don’t expect an overnight solution by filing for bankruptcy. Chapter 7 bankruptcy typically takes around four to six months to close, while Chapter 13 cases stay open for years. You should also be aware that both types of bankruptcy require hundreds of dollars in filing fees.

Long-Term Consequences

Declaring bankruptcy can provide you with the debt relief you need, but there are lasting consequences. For example, a bankruptcy stays on your credit report for ten years, making it harder to take out a loan or find a place to live.

A Bankruptcy Attorney Can Be a Big Help

It’s important to know what you should expect when filing for bankruptcy.  Hiring a bankruptcy attorney may not be the first thing that comes to mind, but doing so can help you avoid costly mistakes. Filing for bankruptcy is a complicated legal process, and the clerks and judges cannot give you legal advice. A lawyer can also help ensure that you are maximizing the amount of property you are allowed to keep from being sold off, so you’re not starting over from scratch. Schedule an appointment today to meet with an experienced bankruptcy attorney and discuss your options.

Why Hire a Real Estate Attorney Before Buying a House?

Why Hire a Real Estate Attorney

Buying a home consistently ranks as one of the most stressful life events people experience. Not only is a lot of money on the line (for most of us, it is the single largest purchase we’ll ever make), but our hopes and dreams for the future are tied up in it. Home buyers regularly consult with a slew of experts along the way—real estate agents, inspectors, mortgage bankers, title examiners, etc.—and yet, despite the fact that it is a complex legal transaction, they rarely hire a real estate attorney.

Though many people will not find it necessary to hire a real estate attorney before buying a house, there are several reasons why it may still be a good idea.

Negotiation

There is usually a lot of wiggle room when it comes to housing prices. Still, buyers regularly leave money on the table because they are simply not comfortable with negotiating. While many real estate agents are great at their jobs, they are generally paid a percentage of the purchase price, so they have every incentive to close the deal and not much motivation to drive the price down.

Real estate attorneys, on the other hand, love to negotiate. The net savings gained from letting a lawyer haggle on your behalf generally more than justifies the expense of hiring them.

Smoothing Out Title Issues

Title and lien issues can derail a home purchase or make your life a nightmare if they are only discovered after the fact. A real estate attorney can perform the title and lien search for you. If the search turns up any potential problems, they can either help resolve them or, just as importantly, let you know when it’s time to walk away from the transaction.

Reviewing Contracts

As anyone who has ever purchased a home can attest, there is a lot of paperwork involved. Most buyers have no frame of reference and are simply told everything is “standard,” so they sign whatever is put in front of them: HOA covenants, inspection reports, disclosures, and more.

While there is usually nothing sinister going on, these documents are important, and the fact that you signed them may come up later. At a minimum, a real estate lawyer can review them and let you know what you’re getting into, but they can also draft new agreements and eliminate many of the junk boilerplate clauses.

Facilitating Complex Transactions

Even a typical home purchase is complicated, but some transactions are significantly more complex. Sales involving trusts, corporations, and other legal entities present different issues, and the assistance of an attorney is strongly encouraged.

Easier Closing

Closing a real estate deal involves orchestrating multiple complicated components, such as filing the deed, closing escrow, and delivering the final payment. Having an attorney on your side can help greatly with keeping everything on track and negotiating any last-minute issues that pop up, such as unexpected home repairs.

Talk to a Real Estate Attorney Today

The best way to find out what a real estate lawyer can do for you is to talk to one. Whether you want full-service assistance throughout the transaction or just need to deal with a specific issue, our experienced attorneys can help ensure your home purchase goes as smoothly as possible. Contact our office to schedule an appointment.

Real Estate: What Is a Breach of Contract and What Are the Remedies?

Real Estate: What Is a Breach of Contract and What Are the Remedies?

For most people, selling and buying real estate will be their most complicated experience with contracts. There are many moving parts: home loans, escrow, title transfers, easements, and more. 

Thankfully, the process is so common that for most people, it will go relatively smoothly (even if it is frustrating at the moment), and the buyer and seller can part ways amicably and with no need for future interaction. 

That is not always the case, however. Sometimes the deal breaks down or if it does go through, one party believes the other was dishonest about key aspects. In these cases, there may have been a breach of contract, and if so, the injured party likely has legal remedies.

Breach of Contract in Real Estate

A breach of contract occurs when one or more parties fail to fulfill their obligations under the agreement. 

Here are some of the most common types of breach of contract in real estate transactions.

The Buyer Backs Out

It’s not uncommon for a buyer to back out of the deal. 

Often it’s because they could not obtain financing for the purchase, or the deal was contingent on the sale of their old home, and they were unable to sell it in time. 

Other times the buyer simply changes their mind and walks away. Depending on the terms of the agreement and timeline of events, any of these may constitute a breach.

The Seller Backs Out

Less common is when the seller backs out of the deal. Typically, this happens when the seller has decided against selling the home or received a better offer from another buyer.

Failure to Disclose Facts or Defects

The seller has a contractual and legal duty to disclose any material facts that affect the property’s value. This can be anything from mold to electrical problems. The information must be something the seller knows or should have known about but that would not have been evident to the buyer.

Remedies for Breach of Contract in Real Estate Deals

Where a contract has been breached, the injured party may have a legal remedy. Here are the three most common remedies for breach of contract in a real estate deal.

Retaining Earnest Money

Earnest money is a deposit (typically 5-10% of the purchase price) put down by the buyer to show they are serious and to get the seller to take the property off the market. 

If the buyer simply changes their mind about the purchase, the seller will generally be able to keep this earnest money. However, if the buyer backs out because they cannot secure a loan, it will depend on the contract terms and whether they provided notice in time.

Monetary Damages

The most common remedy for any breach of contract is monetary damages. The purpose of monetary damages is not to punish the party who breached the contract but to put the injured party in the same position they would be in had the contract gone through properly. 

For example, if a buyer agrees to purchase a home for $200,000 but backs out of the deal and the seller is only able to sell later for $170,000, the seller may be entitled to the $30,000 difference in price plus other expenses incurred.

Specific Performance

Specific performance is a less common remedy where one party is ordered by the court to perform the terms of the contract. This might occur when a seller backs out of the deal and tries to sell to someone else at a higher price. 

The court may order the seller to complete the sale to the first buyer because the property is unique and monetary damages are insufficient to compensate the buyer.

Discuss Your Options With a Lawyer

If you’re involved in a real estate transaction and believe the other party has breached the contract, your first step should be to speak to an attorney. 

Our team has years of experience in these matters; we can evaluate your situation and develop a comprehensive plan for resolving the matter efficiently in your favor. 

Contact our office to schedule your consultation.

How COVID Can Affect Your Estate Planning Needs

How COVID could change the needs of your estate plan

Life is always changing. With it, our estate planning needs to change as well. As far as major life upheavals go, nothing quite compares to the recent COVID-19 pandemic. As it appears to be winding down, at least we hope, now is a good time to take a hard look at your existing estate plan (or to create one for the first time) and evaluate whether your needs have changed over the last couple of years.

Major Economic Changes

Fortunes were made and lost during the pandemic. There’s hardly a single business that wasn’t affected in some way, and the stock market has been, at times, unpredictable. This means it’s time to re-assess the value of your assets. 

The overall valuation may have changed significantly, you may have sold off some properties or acquired new ones, or perhaps you put off retirement for a few more years. Any of these means your existing estate plan needs to be updated and adapted to your new economic circumstances. New investments and legal instruments should be considered to match your goals and minimize tax exposure.

Inflation is also a major factor to consider in updating or creating your estate plan. It’s no secret that high inflation rates currently afflict the global economy, and the U.S. economy is no exception. There are hopeful indicators that inflation has already peaked, but it has likely already affected your estate in a number of ways. The most common is an increase in real estate value and property taxes. There are ways to reduce the overall tax liability of your estate in situations like this, such as putting the property into an irrevocable trust. A general diversification of your investments is also a good way to ride out economic uncertainty.

For some people, inflation brings a few benefits. In 2022, the IRS increased the estate and gift tax exemption from $11.7 million to $12.06 million (double that for married couples). This means that a married couple who already maxed out their lifetime exemption can give away another $720,000 tax-free.

Similarly, the annual gift tax exclusion per individual was raised for the first time in several years, from $15,000 to $16,000. Married couples may give away $32,000 tax-free per individual per year without affecting their lifetime exemption total. It’s important to note that the lifetime exemption amount will be cut in half starting in 2026, so anyone wishing to take advantage should do so without delay.

Change in Outlook

While less tangible, the COVID pandemic has profoundly affected many people’s overall perspective on life. Perhaps they lost loved ones or became seriously ill themselves and started to rethink the legacy they would leave behind. 

Owners whose businesses had been stable for years went through great uncertainty, forcing them to reconsider succession plans and their long-term prospects. 

If you’ve arrived on this side of the pandemic and your outlook has changed, you should be sure your estate plan changes as well.

Meet With an Estate Planning Attorney

Any estate plan should be revisited from time to time as your goals and economic circumstances change. The COVID pandemic has almost certainly affected your estate planning needs, so now is a good time to sit down with an attorney and take stock of the situation. 

Our team has the experience and knowledge to create the plan that is right for your unique situation. Contact our office today.

What Do Estate Planning Attorneys Do and Do You Need One?

What Do Estate Planning Attorneys Do and Do You Need One?

Although estate planning affects virtually everyone during their life and after it, there’s a lot of misunderstanding about it. This misunderstanding extends to estate planning attorneys as well, to the point where many are unsure what it is they do and whether one is necessary.

What Is an Estate Planning Attorney?

Understanding what an estate planning attorney does requires understanding an estate plan. The term “estate” means all of your property.  That is, everything in your name that can be passed on to someone else after you die. An estate plan, as you might guess, is the plan for what will happen to that property when you die or become incapacitated to the point where you can’t make decisions for yourself. If someone dies without an estate plan, their property is distributed among surviving relatives (or to the state, if there are none) according to the laws of intestacy.

Because someone dead or incapacitated can’t speak for themselves, many laws and safeguards are in place to prevent abuse. Estate planning attorneys specialize in this area of law and the documentation required to enable their client’s wishes. They primarily draft wills, trusts, and power of attorney forms that clearly express what the person wanted and hopefully reduce conflict among the surviving parties. Estate planning attorneys also work to minimize the tax consequences of passing along one’s estate.

Do You Need an Estate Planning Attorney?

Not everyone needs an estate planning attorney, but many people could benefit significantly from consulting with one. There is no one-size-fits-all test to determine if you should talk to an estate planning attorney. However, there are several factors to consider that may be helpful.

Size and Complexity of the Estate

It should be no surprise that the greater the value of the estate, the greater the need for comprehensive estate planning. Larger estates generate more intense interest from survivors, potentially leading to conflict. Additionally, the tax consequences are often a bigger concern. Generally, the more complex estates and deceased person’s wishes require the expertise of an estate planning attorney.

Creating a Trust

Trusts are an excellent and versatile estate-planning tool that can help you care for your loved ones, establish your legacy, and even avoid estate taxes. However, they require careful planning and should be created with the help of an attorney.

Children

Parents, especially single parents, can gain peace of mind by recording how they want their children cared for in the event they pass away before the children become adults. This can involve establishing a trust and perhaps designating someone to be a caregiver.

Business Owners

If you are an owner or partner in a business, a succession plan sets out who will be in charge and receive your interest in the company.

Health Concerns

If you have a serious health condition (and even if you don’t), you should consider taking a moment to communicate what will happen if you pass away or if you become incapacitated. For example, if you are about to have major surgery, granting power of attorney and detailing your health directives can help your loved ones make decisions if there are complications.

Talk to an Experienced Estate Planning Attorney

Creating a clear estate plan ensures your wishes are met after you’re gone and reduces uncertainty for your loved ones. Our team has years of experience creating estate plans that range from the basic to the extremely complex. Schedule a consultation today to learn how we can help you with your estate plan.

Your Rights as a Tenant in California

Your Rights as a Tenant in California

Everyone deserves a home; in California, nearly half of all households rent their home. Luckily, California also has some of the strongest tenant protections in the country. However, these protections don’t have much meaning if renters don’t know about them, so we’ll cover some of California’s most important tenant rights.

Right to Non-Discrimination

Both federal and state law prohibits landlords from refusing to rent a property to someone (or renting it to them on unequal terms) for discriminatory reasons. These laws protect specific classes (personal characteristics), including:

  • Race or color
  • Age
  • Ancestry
  • National origin
  • Religion
  • Disability, mental or physical
  • Sex or gender
  • Sexual orientation
  • Gender identity or gender expression
  • Genetic information
  • Marital status
  • Familial status
  • Source of income (including housing vouchers)
  • Military or veteran status
  • Immigration Status
  • Primary language

Right to Habitable Premises

Landlords must provide a safe and habitable rental unit to tenants. This means keeping the property in good condition and including certain basic amenities. The tenant may break the lease and move out or withhold rent if the property is uninhabitable. 

Requirements that make a property habitable include:

  • Hot and cold running water
  • An electrical system, including lighting, that is in good working order
  • A functioning deadbolt on the main entry door and locking devices on the windows
  • A working toilet and bathtub or shower
  • Natural lighting from windows or skylights in every room
  • Clean and sanitary property grounds
  • Smoke detectors
  • Free from structural defects
  • And more

If a condition makes the property uninhabitable, the tenant should bring it to the landlord’s attention and allow them a reasonable amount of time to fix it. Tenants also have their responsibilities, such as keeping the property clean and sanitary; if the tenant created the problem, the landlord may not be responsible for repairing it.

Refundable Deposits

Almost all landlords require renters to pay a security deposit before moving in. The total amount of the deposit required may not be more than the cost of two months’ rent for unfurnished properties or three months’ rent for furnished properties. Landlords may not require a non-refundable pet deposit or any other non-refundable deposit. When the tenant moves out, the landlord may deduct unpaid rent or the reasonable repair cost for damage beyond normal wear and tear. They may also deduct cleaning costs if the property is less clean than when the tenant moved in.

Right to Privacy

Except in an emergency, a landlord may not enter the premises without first giving the tenant written notice at least 24 hours in advance.

Rent Control

Statewide rules about how much landlords can raise the rent annually in California. For most multifamily properties at least 15 years old, the rent may only be raised once per year and by no more than 5% plus the cost of inflation (for a maximum 10% total increase).

Eviction Protections

In most cases, a landlord needs a cause to evict a tenant. The most common cause is failure to pay rent, but it can also be due to a violation of the lease’s material terms (e.g., having a pet when pets are prohibited). The landlord must serve a 3-day notice on the tenant to cure the violation or quit (leave) the premises. The landlord may file formal eviction proceedings if the tenant does not cure the violation.

If the landlord wants to terminate a month-to-month tenancy, they must give you at least 60 days’ notice if you have been there one year or more, or 30 days’ notice if you have been there less than a year. Tenancies involving rental assistance require 90 days’ notice.

Protect Your California Tenant’s Rights

California laws protect renters’ housing rights, but it can feel empty if you don’t fully understand those rights or know how to enforce them. Our attorneys have years of experience in this area and can help you protect your rights through various means, from negotiating with landlords to representing you in court. Schedule a consultation meeting today to learn how we can help you.

The Most Common Causes of Real Estate Litigation

commercial real estate litigation

Real estate transactions are time-consuming and often stressful, so we want them to go as smoothly as possible. Sometimes things go wrong, however, and litigation may be necessary due to the value and importance of the transaction. Here are buyers’ and sellers’ most common causes of real estate litigation.

Breach of Contract

Real estate transactions are primarily about contracts, so it shouldn’t be surprising that one of the most common reasons for litigation is a breach of contract. Setting obligations for everything from title clearance to closing dates, so both parties understand their respective responsibilities can minimize confusion. One of the more common types of a breach is when one of the parties backs out of the sale before it is complete. If the buyer backs out, this will usually mean losing their earnest money. On the other hand, if the seller backs out, for example, to sell to someone else at a higher price, the buyer can sue for breach of contract and sometimes even compel the seller to complete the transaction.

Breach of Duty

Real estate agents have a fiduciary duty to their clients, meaning they must act in their client’s best interest. It may breach their fiduciary duty if they have a conflict of interest and don’t disclose this. For example, suppose a real estate agent represents the buyer and doesn’t disclose that they are friends with the seller or have a personal financial stake in the property. In this case, the buyer suspects that the agent’s interest is divided and costing them money.

Failure to Disclose Defects on the Property

If a seller knows or should know about a defect on the property that affects its value, they must disclose that defect to the buyer. There are many such defects, from roof leaks to mold to electrical problems. However, the problem must not have been evident to the buyer. For instance, if there is a five-foot-wide hole in the roof, the buyer probably should have noticed that on their own. Buyers who litigate over failure to disclose defects usually seek to recover the difference in property value.

Boundary Disputes

Real estate’s legal boundaries should be registered with a government office, typically the county commissioner. However, sometimes those boundaries are registered incorrectly. Other times, the “practical” boundary line doesn’t match the registered boundary lines. For example, an owner may build a fence or even a building on their neighbor’s property, believing it to be their property. These mistakes come to light during the sale of one of the properties. Therefore, verifying the parcel’s boundaries is important to the buyer’s due diligence.

California Real Estate Specialists

The best strategy for real estate litigation is to avoid it entirely. However, consulting with one of our real estate attorneys during the buying or selling process can help bring potential problems to light so they can be dealt with in advance. If you are already in a situation where litigation is necessary, our team can help you resolve the matter fairly. Contact us today to schedule a meeting.

 

What You Need to Know About Filing a Personal Injury Lawsuit

bankruptcy attorney

If you’ve been injured through someone else’s fault and haven’t been able to recover fair compensation for your injuries, filing a personal injury lawsuit against the other party may be your only option. A lawsuit is a complex and adversarial process for determining the facts of a case and how the law applies to those facts. Here we’ll go over what you need to know about filing a personal injury lawsuit.

However, if you are considering filing a lawsuit, it’s important to consult with at least one attorney first. Because of its complexity, it is easy to make a mistake that can lead to you recover less in damages, have your case dismissed, or even a lawsuit against you.

Timing

There’s a strict time period to file a civil lawsuit established by the statute of limitations.  In California, the statute of limitations for most (but not all) personal injury claims is two years. That means a plaintiff must file their lawsuit within two years of the date of their injury. If the time limit is two years and you file a claim after two years and one day, the claim will be dismissed.  However, some claims are on “toll” or on pause. For example, if the plaintiff is in a coma for three years following their injury, the statute of limitations period begins running when they wake up.

Venue and Jurisdiction

It’s not always obvious where a lawsuit should be filed; a plaintiff may have multiple options. They must consider factors related to jurisdiction and venue. Jurisdiction refers to the power of any given court to hear a case. For instance, suppose a plaintiff is a California resident and gets into a car accident in Nevada with a Nevada resident. 

In that case, three separate court systems potentially have jurisdiction over the case: 

  • California state courts
  • Nevada state courts 
  • Federal courts (which have the power to hear cases between residents of different states)

Plaintiffs and defendants may prefer to be in one jurisdiction over another for various reasons, from the rules of procedure to the judges likely to hear the case. Venue is the choice of location within a court system. In the example above, if the plaintiff wants to file their lawsuit in a federal district court, they have a choice between the federal court in Las Vegas or one closer to their home in California.

Bear in mind that the issues of venue and jurisdiction are just about where the proceedings will take place; the question of what laws apply is a separate issue.

Filing the Lawsuit

To officially initiate a lawsuit, a plaintiff must draft a document called a “complaint.” The complaint contains:

  • A statement of facts that supports a cause of action.
  • A demand for judgment for relief.
  • The number of monetary damages sought.

The plaintiff must serve one copy on the defendant and another copy to the courthouse.

They must also file a proof of service of the defendant’s copy with the courthouse. The defendant then has a set amount of time (30 days in California) to respond to the complaint in the form of either a “demurrer” or an “answer.” A demurrer is an objection to the complaint, e.g., that it does not establish subject matter jurisdiction or fails to state facts sufficient to constitute a cause of action. An answer will likely deny some or all of the facts but does not challenge the complaint itself.

If a demurrer is successful, the judge will dismiss all or parts of the complaint. This dismissal can be with or without prejudice; a dismissal with prejudice means the plaintiff cannot try again.

Before Filing, Speak to an Attorney

Filing a lawsuit means stepping into a world full of complex legal rules that take years to learn. An innocent mistake can cost you your entire case and any hope of recovering damages. If you are even considering filing a lawsuit, consulting with an attorney is your best option. Contact us today to speak to an experienced personal injury claim attorney.