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Equity Does Not Relieve Tenant’s Failure to Timely Exercise Renewal

Posted: June 10th, 2012

By Patrick McCormick

A recent article discussed the decision by the Appellate Division First Dept. in 135 East 57th Street LLC v. Daffy’s Inc.1 in which the Appellate Division excused a tenant’s failure to timely give notice of its election to exercise its option to renew its commercial lease because the tenant had “garnered substantial good will in its approximately 15 years at the location, which good will was a valuable asset that would be damaged by its ouster from the premises.” The Court in Daffy’s Inc. referenced the Court of Appeals decision in J.N.A. Realty Corp. v. Cross Bay Chelsea, Inc.2 , which held that “the loss of an option does not ordinarily result in the forfeiture of any vested rights . .”

By decision dated May 3, 2012, the Court of Appeals in Baygold Associates, Inc. v. Congregation Yetev Lev of Monsey, Inc.3 , citing J.N.A. Realty Corp., held that the tenant was not entitled to equitable relief to excuse its failure to timely exercise its option to renew under the circumstances presented, despite the fact that the premises had been continually operated as a nursing home for more than 30 years and more than one million dollars in improvements had been made to the premises.

In Baygold Associates, Inc., Baygold operated a nursing home in Monsey, New York from 1972 through 1975. In 1976, Baygold, as tenant, entered into a lease with Monsey Park Hotel, the owner of the premises, for a ten year term. The lease granted Baygold the option to extend the term of the lease for four ten year periods by giving notice by certified mail, return receipt requested, no later than 270 days before the expiration of each term or extended term. With the owner’s consent, Baygold sublet the premises to its affiliate Monsey Park Home for Adults which operated a nursing home from 1976 through 1985 and made approximately one million dollars in improvements to the premises. In 1985, Monsey Park Home for Adults sub-sublet the premises to Israel Orzel who continued to operate a nursing home at the premises. In August 1985, Baygold renewed the lease for two additional ten year periods. During Orzel’s tenancy, Orzel also made improvements to the premises.

In July, 2005, Baygold directed its attorney to renew the lease for two additional ten year terms. It was disputed whether Baygold’s attorney actually prepared and sent the renewal notice as required by the lease.

In July 2007, the Rubenfeld family, as successor to the owner, entered into a contract to sell the property to defendant Congregation Yetez Lev of Monsey Inc. Rubenfeld’s attorney notified Baygold that its tenancy would expire September 30, 2007 and that Baygold would be a month-to-month tenant. Baygold claimed it had exercised the renewal option and Baygold’s attorney produced a copy of a November 1, 2005, renewal letter but did not produce either a certified mail receipt or a return receipt green card.

Baygold sued seeking a declaration of the rights of the parties in connection with the renewal term. After a bench trial, Supreme Court held that the lease was not properly renewed because Baygold did not comply with the specific lease renewal provisions and denied equitable relief. The Appellate Division affirmed holding that Baygold “failed to demonstrate ‘that it made improvements of a substantial character’ in anticipation of renewing the lease.”

The Court of Appeals granted leave to appeal and on appeal framed the issue as “whether non-renewal would result in a forfeiture by Baygold.” The Court, in citing J.N.A. Realty, noted that “a forfeiture results where the tenant has in good faith made improvements of a substantial character, intending to renew the lease and the tenant would sustain a substantial loss in case the lease were not renewed.” Also, in citing Sy Jack Realty Co. v. Pergament Syosset Corp.4 the Court of Appeals noted that “we have concluded that the ‘long standing location for a retail business is an important part of the good will of that enterprise’ and that a tenant may be entitled to equitable relief through the loss of such ‘a substantial and valuable asset.’” However, the Court of Appeals held that “the forfeiture rule was crafted to protect tenants in possession who make improvements of a ‘substantial character’ with an eye toward renewing lease, not to protect the revenue stream of an out-of-possession tenant like Baygold.”

The Court noted that Baygold had not made any improvements to the premises since 1985, and that neither Baygold nor any of its affiliates was a tenant in possession of the premises at the time of the failure to comply with the lease renewal provision. The Court dismissed any claim that Baygold’s improvements made more than twenty years earlier, when it was a tenant in possession were made “with a view toward renewal of the lease such that Baygold’s equitable interest in a renewal must be protected. Those improvements are too attenuated from Baygold’s failure to exercise the option over 20 years later.”

The Court seemed to place significant emphasis on the fact that Baygold was an out of possession tenant and therefore did not possess any good will in connection with the premises. This, coupled with the fact that Baygold itself did not make improvements to the premises for more than 20 years, in the Court’s view, precluded equity from from intervening to excuse Baygold’s failure to comply with the lease renewal provisions.

Learning the Art of Business Negotiations

Posted: June 9th, 2012

By: Joe Campolo, Esq. email

Tags: negotiation

We are all negotiators, and we face challenging and complex problems of persuasion and influence on a daily basis. We manage workers and work for managers, deal with friends, family, colleagues, clients, merchants, and organizations all the time. Successful negotiation requires agreement and collaboration with other people. Since individuals often do not share the same interests, perceptions and values, skill is needed, personally and professionally in negotiating.

Understanding the dynamics of negotiating is critical in the business world, and is a topic we discuss often within our firm. Learning the art of business negotiations is a necessity for our partners and associates alike. There are numerous seminars, books and theories written on the subject; but the bottom line is that if you don’t master the fundamental skills of business negotiation you could be losing money. This blog will be dedicated to the art of Business Negotiations.

There are three inherent tensions that exist in all negotiations, whether the goal is to make a deal or settle a dispute. These tensions will always exist, they cannot be eliminated but they can be managed.

The first tension is the conflict between the desire for distributive gain (getting a bigger slice of the pie) vs. opportunity for joint gains (finding a way to make the pie bigger). Without sharing information, it is difficult to find trades that might create value, but unreciprocated openness can be exploited.

The second tension is the conflict between empathizing with the other side (demonstrating an understanding of the other person’s interests and point of view) vs. asserting your own views, interests and concerns. Assertion without empathy risks escalating conflict, while empathy without assertion risks jeopardizing ones legitimate concerns.

The third tension is the interest of the agent (lawyer) vs. interest of the client; and the professional reputation and embarrassment when a client changes course.

Additionally, we should all be aware of the 5 most common mistakes that must be avoided to get the maximum out of a business negotiation.

Underestimating your own authority, ability and strengths
Assuming you know what the opposition wants
Overestimating your opponent’s knowledge of your weakness
Becoming intimidated by your opponent’s prestige, rank, title or educational accomplishments
Being overly influenced by traditions, precedents, statistics, forecasts, or cultural icons and taboos

This is the Year to Gift

Posted: April 27th, 2012

By: Martin Glass, Esq. email

Tags: estate planning

Tax changes that President Barack Obama and Congress hammered out in the final days of 2010 discouraged clients from seeking estate planning advice last year, even though estate lawyers insist that there are many planning opportunities that shouldn’t be missed.

It seems that the $5 million estate tax exemption for 2011 and 2012 has all but eliminated “estate tax avoidance” as a motivating factor for clients. With the $5 million exemption, a lot of people breathed a sigh of relief because they said, “I don’t have that much.” It seemed to diminish the concern for estate planning as motivated by the estate tax. It probably took until September for advisers to realize that this really is a planning opportunity for high-net-worth families.

There is so much uncertainty at this time, it’s difficult to give suggestions without saying that the benefits will vary based upon where estate and income tax rates, and estate and gift exemptions, wind up in 2013. Most of 2011 became a year for figuring out how to take advantage of the $5 million exemption before it disappears.

The very wealthy should be planning very aggressively and taking significant advantage of what may be a small window of opportunity. We don’t know what tomorrow will bring. After a temporary suspension in 2010, the estate tax rate had been poised to jump to 55% with a $1 million exemption, or $2 million for couples. Instead, the rate was set at 35% for two years and applies only to estates worth more than $5 million, or $10 million for couples. This year, the president and Congress again will have to address the estate tax issue, as these parameters expire at the end of the year.

The estate tax exemption is tied to the lifetime gift tax exemption, meaning that amounts given away as gifts will be subtracted from the estate tax exemption after death. The big key now is to develop flexible estate plans that work with formulas instead of numbers to retain the integrity of the plan even when there are law changes.

In the end, it appears that the top three reasons that clients sought estate planning last year was to avoid chaos and discord among beneficiaries, to avoid probate and to protect children from mismanaging their inheritance. Minimizing or avoiding estate tax seems to be further down on the list of people’s concerns until they realize just how much the estate may end up paying. For clients with more than $5 million, the time to act is now as 2012 is going to go by quickly.

But there is a possible problem. Even though lifetime gifts of below $5 million during 2012 escape gift tax, the way the Tax Code is now written, if the donor dies in 2013 or later, the applicable exclusion amount reverts to $1 million. As a result, lifetime gifts of over $1 million are “clawed back” into the transfer tax system without the protection of a $5 million applicable exclusion amount, and presto, there’s an estate tax on what had been free of gift tax. Congress could fix this, and even seems to want to, but ongoing legislative dysfunction will darken the chances.

This clawback doesn’t necessarily make it worse for the donor or the estate. Instead of paying a gift tax on the transfer, an estate tax is paid, so it’s pretty much a wash. One advantage is that the donor does get the asset out of his estate and any additional appreciation on the asset goes to the donee. A possible disadvantage or problem is that there may not be enough assets in the estate to pay the estate tax if it now includes taxes from past gifts. A qualified estate planning attorney or tax professional is needed figure out if it’s worth doing the gifting now or waiting until the assets pass through the estate.

A Bright Line Rule is No Longer Bright

Posted: April 10th, 2012

By Patrick McCormick

The long standing “one inch” rule in New York, in connection with actual partial evictions, as explained by Judge Cardozo1 has been that an actual eviction by a landlord, even if partial, and no matter how trivial, will suspend the entire rent owed by the tenant. The reason for such rule, as explained by the Court of Appeals2 is “that the tenant has been deprived of the enjoyment of the demised premises by the wrongful act of the landlord; and thus the consideration of his agreement to pay rent has failed.”

As a result of such rule, practitioners in Landlord/Tenant courts are (or were) well aware that a full 100% rent abatement would result, even if a tenant remained in possession of the premises,3 if a landlord physically expelled or excluded a tenant from any part of the leased premises.

The Court of Appeals in Eastside Exhibition Corp. v. 210 East 86th Street Corp.,4 while claiming it was not overruling this longstanding rule, appears to have done just that.

The facts in Eastside are straightforward: Eastside, as tenant, entered into an 18 year lease with 210 86th Street Corp., as landlord, to operate a multiplex movie theater. The lease allowed landlord to make repairs and improvements without an abatement of rent during the period the work was in progress and also provided that the tenant would not receive an allowance for any diminution in value resulting from the repairs or improvements. Approximately 4 years after commencement of the term, without notice, landlord entered the premises and “installed cross-bracing between two existing steel support columns on both of plaintiff’s leased floors causing a change in the flow of patron traffic on the first floor and a slight diminution of the second floor waiting area.” Plaintiff ceased paying rent alleging an actual partial eviction. At trial, the parties stipulated that the total area of the demised premises was between 15,000 and 19,000 square feet and that the cross-bracing installed by landlord occupied approximately 12 square feet. The Supreme Court dismissed plaintiff’s claim and entered judgment for defendant holding that “the taking of 12 square feet of non-essential space in plaintiff’s lobby constituted a de minimis taking not justifying a full rent abatement.” The Appellate Division, First Department modified, “holding that there is no de minimis exception to the rule that any unauthorized taking of the demised premises by the landlord constitutes an actual eviction” but held that the remedy was not a full rent abatement but compensation to plaintiff for its actual damages. During an inquest, the plaintiff’s witnesses were not able to estimate actual damages testifying that given the variables in the motion picture industry, damages were impossible to determine. The Supreme Court made no damage award to plaintiff and the Appellate Division affirmed.

On these facts, and acknowledging the existence of the long standing rule, the Court of Appeals held “Given the inherent inequity of a full rent abatement under the circumstances presented here and modern realities that a commercial lessee is free to negotiate appropriate lease terms, we see no need to apply a rule, derived from feudal concepts, that any intrusion-no matter how small-on the demised premises must result in a full rent abatement. Rather, we recognize that there can be an intrusion so minimal that it does not prescribe such a harsh remedy.” The Court then enunciated what appears to be a new rule: “For an intrusion to be considered an actual partial eviction it must interfere in some, more than trivial, manner with the tenant’s use and enjoyment of the premises.”

This new pronouncement now opens the door to an analysis, on a case by case basis, as to whether a particular intrusion or taking by a landlord, given the particular facts at issue, is severe enough to warrant any relief at all and, if so, the extent of such relief.

The dissent by Judge Read is well written and worth reading for its analysis as to why the “trivial” taking may not be so trivial on the facts presented and for its historical analysis of the law as it relates to actual partial evictions. The most compelling objection raised by Judge Read is succinctly stated as follows: “The majority has overruled an easy to understand, easy to apply bright-line rule in favor of a new de minimis rule that affords no predictability of outcome. Under Kernochan, it was very risky for a landlord to intrude on leased space in disregard of the tenant’s right to the whole of the property because the tenant might withhold rent. Now it is very risky for a tenant to withhold rent where the landlord wrongfully appropriates any portion of the leased premises because it is left up to the courts to determine whether the ouster is merely trifling in amount and trivial in effect. This determination will inevitably require expensive, protracted litigation with an uncertain resolution (citation omitted).”

It was the predictability of outcome that previously guided both landlords and tenants and helped guide their decision making process. Now, without such predictability, will landlords be more willing to take space from tenants? Will tenants continue to pay rent even if landlords trespass and take back portions of the demised premises instead of availing themselves of the costly and often times lengthy, and now unpredictable, judicial process? Only time will tell what the fallout from this decision may be.

Medication Wake-Up Call: It May Be More Than an Accident

Posted: March 18th, 2012

By: Martin Glass, Esq. email

Tags: elder law

It can be extremely dangerous for aging parents to rely only on memory when it comes to taking medication. It’s amazing how many aging folks have memory loss issues. A large percentage of those with memory problems go on to develop dementia.

Take this simple example of a senior couple. Both are in their mid 80s, but they’re independent and dad still drives locally. They take care of themselves. Except, unbeknownst to anybody, mom was forgetting to take her pills. Last month she had six left over at the end of the month, so she decided to take them all at once.

She ended up in the emergency room, but luckily she’ll be OK. Hopefully the rest of the family just got a wake-up call that all is not OK. At this point dad or the children need to step in and take a closer look at what’s going on. Oftentimes dad is in no position to take on the role due to his own age and limitations.

It’s great that medical advances allow us to live longer than ever and to enjoy our lives, but it comes with a price. The price is that most of us will need medication to control various chronic conditions, such as heart disease or high blood pressure. Another price is that once we take one medication, it can have side effects, oftentimes requiring another medication to counter those side effects. This can easily add up to taking 6 or 7 pills multiple times a day, enough to confuse anyone.

To further complicate matters, some of these medications are supposed to be taken three times a day, some two times a day, some before a meal and others with food. Like everybody else, our parents get distracted and easily lose track of time. If they have an appointment or an event that disrupts their normal routine they may forget to bring their required pills with them. What’s the worst that can happen? They can wind up in the hospital for neglecting to take them or worse, can take a fatal overdose trying to catch up.

Fortunately, there are electronic devices that can help with this, provided that a parent is willing and able to learn to use them. There are a variety of electronic pill dispenser boxes; some have sound alarms while others have flashing lights. Most of them can be set to go off once, twice or three times a day. There are even ones that drop the pill or pills out to make sure the user takes the correct ones at the correct time.

A time alarm dispenser would work great in the elderly couple example I gave above. The box will light up when it’s time to take a pill, then the electronic alarm sounds for one minute and repeats every few minutes until the person opens the dispenser. More often than not you would need two of them; one for mom and another for dad. This type of a device works best if both parents spend a lot of time at home, and that they know that the lights and buzzers are to remind them when it’s time for their medications.

But there’s something else to keep in mind. The medication-forgetting incident is a red flag. If a parent takes six days worth of pills at once, it’s a tip-off that something is going wrong with mom’s judgment. It could be an early sign of developing dementia. It may be just a case of forgetfulness, but it’s definitely a sign that it’s time to check out the reasons behind mom’s episode. Regular doctors or emergency room doctors may not suggest it, as they are busy with lots of patients. It may be up to you to take the follow up steps and suggest testing by a neurologist.

If your parent is taking multiple medications, you should open a dialog about their daily routine taking required medications. You should ask if he or she has ever forgotten to take them, and beyond that you should look at the bottles yourself. Find out when your parent gets medication refills. If it’s monthly, and you find full or partially full bottles at the end of the month, it’s time to get involved in the matter. Or, the reverse may be happening. Are all the pills gone by the middle of the month? Maybe mom keeps forgetting that she took them and is taking them again.

Having an engineering background, I am a huge fan of all the electronic devices, especially those that help us help our aging parents. New products are coming on the market all the time. But we still need to acknowledge the fact that our parents are aging and they are not going to be the same year after year. Devices can’t take the place of our own observations and actions to protect them.

Don’t wait until mom has an episode as a reason to have the necessary conversation with your parents about their future. Do your parents have Durable Power of Attorneys, or Health Care Proxies? How about a discussion about what would happen if either parent needed help at home? Now is the time to see an Estate Planning attorney, while your parents still have the capacity to make decisions about their future. Otherwise, you may be looking at a long, costly and often humiliating process of obtaining guardianship over them.

The Dangers of Your Digital Death

Posted: February 12th, 2012

By: Martin Glass, Esq. email

Tags: estate planning

Ian Fleming once wrote in one of his James Bond novels that you only live twice. Well, it now seems that you die twice as well. The first is your paper death and the second is your digital death. Digital death is quite a new phenomenon, so most of us simply aren’t prepared for it. But your digital death could be far more troublesome than the paper version.

You already know what to do about your good old-fashioned paper death. You write a Will, setting out which of your loved ones will inherit your property and other assets. Of course, half of us still don’t bother to do a Will, which is ridiculous, but that’s the topic for another day.

Unfortunately, even fewer of us are prepared for our digital death.

When we die, our body and soul aren’t the only things that stop functioning; our online persona will also stop dead in its tracks. This is a big problem, now that we live such active online lives. We have net-based bank and savings accounts, pensions and investment portfolios, and personal effects such as music, movies, photographs, blogs and social media accounts.

As banks, insurers and other financial organizations push towards paper-free statements to save money (and the planet, they claim), the trend will only grow. In the online world, you won’t leave a paper trail when you die. This makes it extremely difficult for relatives or fiduciaries to put the online pieces back together.

If you want your loved ones to know about your online activities after you die, you must assemble all the necessary data. You could call it your digital will. If not, your digital effects will effectively be buried with you. Ancient tribal societies used to do this so people could use their most precious possessions in the afterlife.

When people died in pre-digital days, they generally left plenty of paperwork, so relatives could find where the money was. That’s not so easy if their personal and financial data are buried on unnamed websites. Even worse (for some people) is if they have a massive digital music collection, but you are struggling to access it from their computer. Most likely their Will doesn’t give any clue as to who is supposed to inherit it.

Passwords are another problem. Even if you have a vague idea of where they bought their pensions, annuities and insurance, you will need their login details to access them. If your loved one has uploaded photographs and videos to social media such as Facebook and YouTube, you will need login details for them as well.

People are starting to include this sort of information in their Wills but they’re few and far between. The danger is that a Will is a public document, which anybody can view by requesting a copy from the Surrogate Court. You won’t want your login passwords publicized this way.

One way to tackle this problem is to write and print out all the account numbers for your pensions, investments, insurance policies, and so on, and hand them to a relative for safekeeping, in case of your death. Unfortunately, even if you’re smart enough to do that, you will probably fail to update the information. And don’t forget to include all of your online passwords that seem to change on a weekly basis.

Maybe a better option is to store all the information in one of the growing numbers of online digital legacy lockers. It is quite a problem, and one few of us have faced up to. Dying once is bad enough. Dying twice could be even worse.

When you die, you will leave a digital legacy behind you. You want to leave it to the right people. You also want to prevent online fraudsters (or even greedy relatives) from robbing your digital grave, or even bringing your online ID back from the dead.

Start thinking about it now. Otherwise your digital death could come back to haunt your family.

Delayed Disclaimer: Carrier Who Hesitates May Be Lost

Posted: February 11th, 2012

Tags: insurance

By Scott Middleton

Insurers beware, you may be forced to provide coverage for personal injury claims if you wait too long to disclaim coverage of an insured. Insurance Law § 3420(d)(2) requires a liability insurer to give the insured or the injured person written notice of disclaimer of a personal injury claim “as soon as is reasonably possible.” So what exactly does “as soon as is reasonably possible” mean? The First Department recently spoke on the issue, and their answer may catch some insurers off guard. This Advisory will explain when insurers need to disclaim and serve as a reminder for those in the Second Department of the consequences that a delay in disclaiming coverage can have.

The First Department recently overruled its prior precedent and adopted the Second Department’s rule, holding that an insurer (including excess insurers) may not delay the issuance of a disclaimer on the grounds that the insurer knows to be valid while investigating other possible grounds for disclaiming. This ruling, handed down January 17, 2012 in George Campbell Painting v. National Union Fire Insurance Company of Pittsburgh, PA, 937 N.Y.S.2d 164 (1st Dept. 2012), expressly overruled the First Department’s prior precedent that had permitted the insurer to disclaim promptly after it completed its
investigation, even if it learned of the insured’s late notice prior to a complete investigation
(DiGuglielmo v. Travelers Prop. Cas., 6 A.D.3d 344, 776 N.Y.S.2d 542, lv. denied 3 N.Y.3d 608, 786
N.Y.S.2d 811 (2004)).

So what does this mean for insurers going forward? For those in the First Department this is a major shift from the prior rule, and for those in the Second Department, this serves as an important reminder of the consequences that may befall an insurer if they unreasonably delay disclaiming coverage of an insured.

The Second Department never adopted the rule behind DiGuglielmo, but rather adhered to the notion that when the ground for the disclaimer is obvious on the face of the claim, a delay in disclaiming coverage is unreasonable as a matter of law. This rule, which has now been adopted by the First Department, comes from the 2001 case City of New York v. Northern Insurance Company of New York, 284 A.D.2d 291, 725 N.Y.S.2d 374 (2d Dept.2001), where the Appellate Division found the two month delay in responding to the City’s claim was unreasonable as a matter of law, because it was clear on the face of the City’s claim that the notice was late. The insurer justified its delay in disclaiming coverage on the ground that it had to investigate whether the City was an additional insured. However, the court found this excuse insufficient, as such investigation was unrelated to the reason for the disclaimer and the disclaimer could have been asserted at any time.

The rule, stated in its simplest form, precludes an insurer from delaying issuance of a disclaimer on a ground that the insurer knows to be valid while investigating other possible grounds for disclaiming. For primary and excess insurers alike, this means that once it is evident that there is a basis to disclaim coverage, whether it is late notice or some other ground, the insurer must notify the insured immediately. Importantly, this requirement does not preclude the insurer from continuing its investigation and thereafter supplementing its disclaimer with additional grounds, it simply mandates that once a ground for disclaimer is known, the insurer must notify the insured as soon as possible.

Failure to adhere to this rule will likely lead the court to deny the coverage disclaimer. The consequences of such denial will likely be the requirement of the insurer to bear the responsibility of providing coverage. This was the result in Northern Insurance Company of New York, where the court found that Northern was obligated to defend, and if necessary, indemnify the City and to reimburse the City for all past defense costs in the underlying personal injury action. For Northern, this all could have been avoided had they disclaimed coverage upon receiving the claim, as the notice from the City was not received for close to 16 months after the occurrence of the underlying accident, which was well outside the permissible time to notify the insurer.

Accordingly, it is imperative that insurers disclaim coverage immediately once grounds for such disclaimer are evident. Remember, this requirement is applicable to both primary and excess insurers. And lastly, hesitation can lead to monetary consequences and liability for the insurer. It is our goal that our clients avoid these potential pitfalls. Please feel free to contact the firm with any further questions.

McCormick featured in LIBN article “Be Concise, Accurate When Responding to RFPs”

Posted: January 25th, 2012

“Be Concise, Accurate When Responding to RFPs”

By Kristen D’Andrea, Long Island Business News

More than ever, private clients and businesses are shopping for bargains in legal services. And as more legal teams respond to requests for proposals, the importance of drafting a concise and accurate response is paramount to a firm’s business.

“From a firm perspective, we’re in favor of them,” said Patrick McCormick, partner at Campolo, Middleton & McCormick in Bohemia. “If we think we can provide value at a competitive price, we’ll get involved.”

It is not uncommon for law firms to bid on RFPs for government or municipal work. “Generally, they’re well drafted by the municipality and we know exactly what they’re looking for,” McCormick said.

Unfortunately, the same can’t be said for some responses.

Amy Stein, professor of legal writing at Hofstra University’s Maurice A. Deane School of Law, likened submitting an RFP to being in the honeymoon stage. If the entity that put out the request struggles to understand a response, they’ll likely be concerned about a firm’s ability to follow direction in litigation. “How you put together your proposal is foreshadowing to a company of how you’ll act as a business partner to them,” Stein said.

In drafting a response, Stein stressed the importance of simple steps, such as following instructions and doing homework. If an RFP has 10 questions, each with three sub-parts, she advises responders to go through each item step-by-step. The order in which the RFP is organized can likely offer a glimpse into the company’s priorities and needs.

Still, she doesn’t recommend relying solely on the contents of an RFP to learn about the company. “Do your research and you might pick up information about their business that’s not in the proposal,” she said. “Maybe a partner at the company went to school where someone from your firm did.” Including any additional information about a company, obtained outside of the RFP, will show that the responder is hungry, she said.

Writing clearly and effectively, and proofreading, are all critical to submitting a winning RFP, Stein said. “Handing in a proposal with a typo is like going on a job interview without brushing your hair,” she said.

McCormick recommends being short and sweet. “You want to respond completely but there’s no need to say more than needs to be said,” he added. In fact, submitting the longest, most verbose response may work against you, Stein said.

Should a firm’s marketing staff help draft a response to an RFP? It’s fine to ask them for help with editing, McCormick said, but it’s important the people who are going to be involved in doing the work respond. The people who will know how long a project will take to complete and the types of consultants needed should run the show.

An RFP is not the place to market yourself, McCormick cautioned. “You should already be past that stage,” he said. Those putting out the requests want to know a firm is qualified to do the necessary work at the price stated.

When it comes to bids, “Don’t say you’ll do an entire case for $250 if your hourly rate is $250,” said Stein. Rather, when drafting a response, attorneys should be careful not to promise anything unethical or they can’t deliver. “Be honest and realistic,” she said. “Don’t guarantee you

will always collect all of their debts, for example.”

Likewise, if the business reading the RFP responses finds a law firm that bid an extremely low price, it should raise a red flag the firm might not understand the work that needs to be done, is not well staffed, or does not have a lot of business, McCormick said.

Ultimately, responses should be customized and tailored to the individual needs of the entity putting out the request. While it’s fine to work off a response from another RFP, Stein recommends ensuring at least 15 percent is personalized.

McCormick agreed. “No one wants to see a form or cookie cutter response,” he said.

Read it on LIBN.

Special Care for Special Needs Children

Posted: January 19th, 2012

By: Martin Glass, Esq. email

Tags: estate planning

“Special needs children” are those who need extra assistance. They may be disabled, have learning issues, Down Syndrome, Cerebral Palsy, ADD, autism, muscular dystrophy, depression, obsessive compulsive behavior, closed head injury, spinal cord injury, or any one of a host of other physical or mental challenges. Sometimes those problems are severe, other times children function normally only at a lower level. Special needs children usually need more emotional support, have higher expenses and need additional financial resources for a longer period of time. It is possible (if not probable) that a special needs child will require assistance throughout his or her adult life.

When a special needs child loses his or her parents (whether that special needs child is 8 years old or 50 years old), he loses his prime support network. It is important to understand the devastation of that loss and to try to put a support system in place — just in case — to cushion the blow. Issues change with age, but in general parents must think through who will monitor that child’s welfare, help him apply for and continue to receive benefits, help him decide whether to continue working, how to get around, and fulfill supplemental needs like vacations or travel. Special care must be given to who the guardian, trustee and advocate will be, and it is especially important in this case to line up successors.

Many special needs children and adults pay for food, shelter and some medical costs with money from governmental programs funded by the Social Security Administration and Medicaid and some state sponsored programs. Even if a child is covered under a private health insurance plan, that may not be enough. Medicare and private insurance do not cover residential care or most medication expenses. Medicaid does cover those expenses and for most special needs children.

Medicaid is the most important government benefit. Special Needs Trusts, which preserve Medicaid eligibility, can be created to allow the child to be eligible for governmental assistance. The Trust can be set up by a parent, grandparent, guardian or the court. It can be funded while the parent is alive or upon death or even through a life insurance policy. Keeping the child’s assets in trust reduces the risk that the inheritance will be squandered, mismanaged or subject to government or creditor claims.

Some children’s “special needs” are not grave enough to require governmental assistance. And then there are others whose problems are not serious enough . . but perhaps may be if they deteriorate. The issue that must be decided is whether the Special Needs Trust should be one that qualifies for governmental assistance (and is therefore is more restrictive) or one that is more conventional — one, for example, that simply provides for the child’s health and support for his or her lifetime. A qualified Estate Planning attorney can assist in navigating through these various decisions.