MAPA Wins in the Valley

On August 4, 2017, in Cameron County, Texas, a jury decided that an insurance client of MAPA did not breach its agreement with a policyholder from Brownsville by failing to pay for any damages alleged to have been caused by a wind and hail event on May 28, 2014.  The jury also concluded that neither the adjuster nor adjusting firm assigned by the carrier had committed any unfair or deceptive acts in their adjustment of the claim.  MAPA partner David P. Salyer tried the case on behalf of the carrier, the independent adjuster, and independent adjusting firm with the assistance of his paralegal, Amber Atkins.  Partner Chris C. King also assisted in the preparation of the case.  The case is significant in that it is the first case to be tried in Texas under the new statutory rules passed by the legislature in 2011 affecting the causes of action and remedies that may be asserted against the carrier and its adjusters.

SCOTUS MAKES FORUM SHOPPING HARDER

By: James B. Galbraith with Amanda D. Wright

Many lawsuits today are very expensive to prosecute, often document and expert intensive.  This is true of Pharmaceutical Drug cases and Toxic Tort Chemical Exposure cases, to name a few.

With tort reform, certification requirements for a class action plaintiff’s claim now make that status much harder to attain.

Plaintiff attorneys sometimes need a large number of claimants to support and justify the investment of a significant amount of hours, dollars, and expertise.  This is most readily demonstrated in recent litigation involving, Plavix, Essure, General Motors Starters, asbestos and silica products, breast implants, MTBE, talcum powder, and Round-Up exposure to name a few.

With the class action vehicle not being so readily available, innovative Plaintiff attorneys have resorted to joining hundreds and even thousands of claimants from all over the country into a single lawsuit.

However, a recent 8-1 decision, by The U. S. Supreme Court is bad news for plaintiff attorneys shopping around the nation for the most advantageous place in which to file their lawsuits. In Bristol-Myers Squibb Co. v. Superior Court of California the Court made it clear that a nonresident defendant must have specific case-linked contacts within a state relating to the subject matter of the lawsuit before a state court can exercise specific personal jurisdiction.

Bristol-Myers Squibb, maker of the blood thinning prescription drug Plavix, was sued by a group of more than 600 plaintiffs in California state court alleging that they had been harmed by Plavix. Bristol-Myers Squibb, a large pharmaceutical company, is incorporated in Delaware, headquartered in New York, and maintains substantial operations in both New York and New Jersey where Plavix was developed. The U. S. Supreme Court noted that Bristol-Myers Squibb does significant business in California, including marketing Plavix, but it did not develop, manufacture, package, or label Plavix from there, and the overall marketing plan and regulatory approval work for Plavix was not done in California.

More than 590 of the plaintiffs were not residents of California. The nonresidents were not prescribed Plavix in the state, did not buy the drug there, and were not injured or treated for alleged injuries in California. The California Supreme Court denied general personal jurisdiction but ruled that the state court had specific personal jurisdiction because the nonresident claims were similar to those of the California resident plaintiffs.

The U.S. Supreme Court reversed and held that the California state court did not have specific personal jurisdiction over the nonresidents’ claims. Allowing the suit to proceed in California without identifying an adequate link or minimum contacts between the state and the nonresidents’ claims would violate the due process clause of the Fourteenth Amendment. In so holding, the Court stated that regardless of Bristol-Myers Squibb’s California activities that are unrelated to the Plavix litigation, the California court cannot claim specific jurisdiction because all of the conduct giving rise to the nonresidents’ claims occurred outside of California. However, the Court left open the question of whether the due process clause of the Fifth Amendment imposes the same restrictions on the exercise of specific personal jurisdiction by a federal court.

As a result of this Supreme Court Opinion, not only must the defendant have sufficient contacts with the State for the court to have the power and authority (jurisdiction) to preside over and ultimately resolve the dispute, but if the lawsuit is not brought in the defendant’s home state or state of principal place of business there must also be a “causal nexus” between the defendant’s contact with the State and each plaintiff’s injury. This will likely result in fewer parties per case, but more lawsuits filed in multiple states. The costs of prosecuting multiple cases in various courts will significantly increase. That will likely result in fewer of these lawsuits being filed.

This article has been prepared for educational and informational purposes only and does not constitute legal advice. The laws of other states and nations may be entirely different from what is described in this article. Because of these differences, you should not act or rely on any information on this article without seeking the advice of a competent attorney licensed to practice law in your jurisdiction for your particular problem. The author has endeavored to comply with all legal and ethical requirements in writing this article and does not desire to solicit or represent clients based upon their review of any portions of this article which do not comply with the legal or ethical requirements of the jurisdiction in which the client is located. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship.

Chris King celebrates Ten Years at MAPA

McLeod, Alexander, Powel & Apffel, P.C. would like to congratulate, celebrate, and thank Christopher C. King for his ten years of hard work and dedication.

Chris associated with the Firm in 2007 and became a Firm Officer in 2016. His principal area of practice is litigation, with an emphasis on personal injury defense, mass toxic tort law, general civil litigation and railroad law. Chris represents a variety of clients, from private individuals to major companies such as BP Products North America, BNSF Railway Company, Lumber Liquidators, Inc., and Union Pacific, insurance companies such as Texas Windstorm Insurance Association, and governmental entities such as the City of Galveston and Galveston Central Appraisal District.  Chris also practices family law and is now accepting immigration cases.

In his personal time, Chris is active in the Gulf Coast Big Brothers Big Sisters organization and serves as Vice President of the Jamaica Foundation of Houston.

Chris was recently selected to the exclusive Texas Super Lawyers® Rising Stars list for 2017.

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Mediation

McLeod, Alexander, Powel & Apffel, P.C. offers alternative dispute resolution services as an effective and affordable means to resolve legal disputes. Through mediation, parties meet with a neutral mediator in a confidential and informal setting to resolve conflicts. Our attorneys act as resilient facilitators with the ability to navigate through complex legal issues and assisting clients and lawyers in reaching an amenable resolution.

Which Business Structure is Right for You?

 

By Amanda D. Wright

            Of all the choices you will make in starting a business, one of the most important will be choosing the type of legal business structure for your company.  This decision can affect the amount you pay in taxes, the ease or difficulty in selling shares or interests in your company, the corporate formalities that you will have to adhere to, continuity, and the protection of your personal assets from business debts and liabilities.  This important decision should be made in consultation with an attorney and your certified public accountant.

            In the State of Texas there are a number of business structures to choose from:

Sole Proprietorship

            The Sole Proprietorship is the most common and simplest business structure.  In a sole proprietorship a single individual conducts business without formally incorporating his or her business.  A sole proprietorship can operate under an assumed name if the proper form has been filed in the County’s records.  A sole proprietorship may use the terms “Company” or “Co.” in its assumed name but cannot use any term to imply incorporation such as “Inc.” or “LLC.”  Because the sole proprietorship is not formally incorporated and entirely owned by one individual, its owner is personally liable for all financial obligations of the business.  Sole proprietors generally need to make quarterly estimated tax payments, which include both income tax and self-employment taxes for Social Security and Medicare.

Corporation

            A corporation is a legal person which provides limited liability, centralization of management, perpetual duration, and ease of transferability of ownership interests that has formally filed incorporation records with the Secretary of State for the State of Texas.  Owners of a corporation are referred to as “shareholders” while the people who manage the business and its affairs are called “directors.”

            Texas State law requires that shareholders enter into an agreement which provides for the management of the corporation and process for eliminating and replacing directors.

            There are two common types of corporations: a “C” corporation and an “S” corporation:

  • “C” corporations are separately taxable entities which file a Form 1120 corporate tax return and pay taxes at the corporate level.  As a result, “C” corporations face the possibility of double taxation if the corporate income is distributed to the shareholders as dividends.  Tax on corporate income is paid first at a corporate level and again at the individual level on dividends.
  • “S” corporations are pass-through entities; meaning they file an informational federal tax return (a Form 1120S), but no income tax is paid at the corporate level.  Profits and/or losses of the corporation “pass through” the corporation and are reported on the shareholders’ personal tax returns.  Any tax due is paid at the individual level by the owners.

Because of the often complex legal and tax implications, it is important to seek the advice of an attorney before choosing the best management structure for your corporation.

Limited Liability Corporation

            A limited liability company (“LLC”) is a legal entity which enjoys the powers and benefits of both a corporation and a partnership. The owners of a LLC are called “members.”  A member can be an individual, partnership, corporation, trust, or any other legal or commercial entity.  A  LLC can be managed by its members or by managers, but the management structure must be stated in the LLC’s certificate of formation.  If more than one member owns the LLC, a member agreement is necessary to set forth the rights and obligations of the members.

            Generally, the liability of the members is limited to their investment and they often enjoy the pass-through tax treatment afforded to shareholders of an “S” corporation.

            Because of the tax classification rules and structural flexibility afforded to its members, those contemplating forming a LLC should consult with an attorney before choosing this type of business structure.

General Partnership

            A General Partnership forms when two or more people associate to carry on a business for profit.  The general partnership typically operates in accordance with a formal agreement between the parties known as a partnership agreement.  There is no requirement that the agreement be in writing or filed with the State, but if the agreement is unwritten, the State implies many terms.  Therefore, much care should be exercised to understand the implications of organizing in this manner.

            When using this form of business entity, an assumed name certificate (commonly known as a “doing business as” or “d/b/a”) should be filed in all counties where business is conducted under the assumed business name.

            It is important to understand that in a general partnership, all partners are personally liable for partnership debts and obligations.

Limited Partnership

            A limited partnership is a partnership which contains one or more general partners and one or more limited partners.  A limited partnership operates in accordance with a written or oral agreement between the partners, known as a partnership agreement.  The partnership agreement dictates the general affairs of the limited partnership and how it conducts its business.  The partnership agreement is not required to be publicly filed, but the limited partnership must file a certificate of formation with the Secretary of State. General partners are personally liable, but only for partnership debts. Limited partners can enjoy the same protections from partnership liabilities which corporate shareholders enjoy. For liability reasons, many limited partnerships have a corporation or an LLC as their general partner.

Limited Liability Partnership

            A limited liability partnership is a limited partnership which has elected to limit its general partner(s)’ liability.  Because of the limited liability afforded to the general partner, at least one managing partner of the limited liability partnership must bear liability for the entity’s actions in the same way owners of a general partnership are exposed.  While limited liability partnerships share the same tax advantages of a limited liability corporation, their owners cannot be a corporation.

Non-Profit Organization

            A non-profit organization is a business entity which uses its surplus revenues to achieve its stated goals rather than distributing them as profits or dividends. If a non-profit wishes to accept tax-deductible donations from donors, it must also apply for a designation as a charitable organization from the Internal Revenue Service.

Unincorporated Social Clubs

            An unincorporated social club is an organization that is formed for “pleasure, recreation, and other similar purposes.” These organizations do not provide any goods or services to the general public.  Common examples of social clubs include country clubs, college fraternities, homeowners’ associations, and hobby clubs.

            Unincorporated social clubs are typically supported by membership fees, dues, and assessments and do not generate any profit.  The organization’s net earnings cannot be for the benefit of any particular individual having a personal and private interest in its activities.  Unincorporated social clubs may receive tax exempt status if they meet strict requirements specified by the IRS.

            Choosing the right business structure can be a daunting decision.  With the assistance of a skilled corporate attorney, you can make an informed and reasoned decision as to which type of business structure best suits your needs.

This article has been prepared for educational and informational purposes only and does not constitute legal advice. The laws of other states and nations may be entirely different from what is described in this article. Because of these differences, you should not act or rely on any information on this article without seeking the advice of a competent attorney licensed to practice law in your jurisdiction for your particular problem. The author has endeavored to comply with all legal and ethical requirements in writing this article and does not desire to solicit or represent clients based upon their review of any portions of this article which do not comply with the legal or ethical requirements of the jurisdiction in which the client is located. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship.

 

Christopher C. King Recognized in Super Lawyers® Rising Stars 2017 List

McLeod, Alexander, Powel & Apffel, P.C. is proud to announce that Firm Officer Christopher C. King was selected to the exclusive Texas Super Lawyers® Rising Stars list for 2017.

Mr. King associated with the Firm in 2007 and is now a Firm Officer. His principal area of practice is litigation, with an emphasis on personal injury defense, mass toxic tort law, general civil litigation and railroad law. Mr. King’s docket spans Galveston, Harris, Fort Bend, Brazoria and Jefferson County. Mr. King also practices family law and is now accepting immigration cases.

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Mr. King represents a variety of clients, from major companies such as BP Products North America, BNSF Railway Company and Union Pacific Railroad, to insurance companies such as Texas Windstorm Insurance Association, and governmental entities such as the City of Galveston and Galveston Central Appraisal District.

In his personal time, Chris is active in the Gulf Coast Big Brothers Big Sisters organization and serves as Vice President of the Jamaica Foundation of Houston.

MAPA Founder Bob Alexander

Alexander 2It is with a heavy heart that MAPA announces that one of its founders, Robert “Bob” Warren Alexander, 96, passed away peacefully January 31, 2017, in Muleshoe, Texas. He was born February 19, 1920 in Paris, Texas to Morgan Provine and Grace Clara Alexander. Bob grew up in Paris, Texas, graduated from Paris High School and attended Texas A&M University, graduating with a degree in Petroleum Engineering in 1941.

Bob married Donna Dilley White in 1942 in Council Grove, Kansas. They had three daughters, Julie White, Barbara Dee and Peggy Ann. They were happily married for 72 years. Upon his graduation from A&M he was commissioned as a 2nd Lieutenant and served honorably on the European Front during WWII. Bob was a member of the 9th Armored Division serving as a staff member under General John W. Leonard. He attained the rank of Captain and was awarded the Bronze Star for valor.

Following his discharge from the Army he returned to Austin, Texas where he attended Law School at the University of Texas, graduating with his LLB in 1948. He joined the law firm of Wigley, McLeod, Mills and Shirley in Galveston, Texas and practiced there until 1965 when the Firm was named McLeod, Mills, Shirley, & Alexander. In 1965 he and his partners established the Law Firm of McLeod, Alexander, Powel & Apffel where he practiced until his retirement in February of 1979, handling a number of legal matters for Allstate Insurance and served as Designated Counsel for Atchison, Topeka and Santa Fe Railway (now BNSF Railway).

Shortly after his retirement, Bob and Donna moved to their ranch in Bandera, Texas.

Bob was preceded in death by his parents, his wife, Donna, his brother, George, and his sister, Virginia.  He is survived by his three daughters, Julie Alexander Cage and husband J.D. of Muleshoe, Texas, Barbara Alexander of Eugene, Oregon and Peggy Alexander Frese and husband A.C. of Birmingham, Alabama, eight grandchildren and thirteen great grandchildren.

McLeod, Alexander, Powel & Apffel, P.C. is eternally grateful for the leadership, hard work and example set by Bob  in founding our Firm and the Firm continues uphold his legacy of  integrity and ethics.

FMC Affirms Access Fees Ruling in Favor of Port of Galveston

By: Amanda D. Wright

On June 16, 2014, three private parking lot operators filed a legal action with the U.S. Federal Maritime Commission (“FMC”) against The Port of Galveston and its subsidiary, the Galveston Port Facilities Corporation (“GPFC”) alleging that access fees assessed against the companies to drop off and pick up cruise ship passengers at the Galveston Island Cruise Terminal violated Sections 41102(c), 41106(2), and 41106(3) of the Shipping Act of 1984.

On November 21, 2014, Senior Administrative Law Judge Clay C. Guthridge issued a ruling in favor of the Port and GPFC dismissing the parking lot operators’ claims under Sections 41102(c) and 41106(3) of the Shipping Act.  Judge Guthridge subsequently dismissed the parking lot operator’s remaining claim under 41106(2) of the Shipping Act, with prejudice to refiling, on December 4, 2015.

The private parking lot owners appealed this decision to the FMC itself. On January 13, 2017, the full United States Federal Maritime Commission unanimously affirmed Administrative Law Judge Clay C. Guthridge’s rulings in favor of the Port.

Anthony P. Brown, acting as lead counsel, along with David E. Cowen, Amanda D. Wright, and Jocelyn A. Holland of McLeod, Alexander, Powel & Apffel, P.C. represented the Port entities.

News of this decision is being reported in various cruise industry publications, such as Cruise Industry News.

Insurance Defense

McLeod, Alexander, Powel & Apffel, P.C. represents a number of state, national, and international insurance companies on a wide variety of insurance matters in both state and federal courts.  The Firm has significant experience in successfully defending insurance carriers against claims arising from a variety of matters, including:

  • Windstorm & Hail Claims
  • Property, Fire & Casualty Claims
  • Insured Liability Disputes
  • Insurance Coverage Disputes
  • Bad-Faith Litigation
  • Premises Liability Claims
  • Products Liability Claims
  • Motor Vehicle Accidents
  • General Liability Claims
  • Personal Injury Claims

The Firm is knowledgeable and experienced in mediation, arbitration, negotiation, trial, appeals, and appraisal of a wide range of insurance matters.

MAPA Law receives “Best Law Firm” Recognition

U.S News & World Reports’ Best Lawyers ® has selected McLeod, Alexander, Powel & Apffel, P.C. as one of its 2017 Best Law Firms.  The Firm was nationally recognized as a “Tier 1” law firm in Railroad Law.  The Firm also received the designations of a “Tier 1” in Railroad Law and “Tier 2” in Personal Injury Defense Litigation law firm in the Houston Metro area.

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