Joplin, MO Business Blog

New Challenges in Mid-Missouri

These past few months have been interesting for me and my children.   We have moved to the mid-Missouri area that includes the beautiful Lake of the Ozarks.  This area includes Camdenton, Eldon,  Laurie, Lake Ozark, Osage Beach and Versailles.  For my children it means a new school and new friends.  Thankfully they have adjusted well and have made new friends.  For me, it means giving up my solo practice and joining a small firm that has five other attorneys.  I joined Curran & Sickal the first of the year and have been busy ever since.  The firm is a general practice firm and includes a large real estate and business practice.  My practice will be  moving more into the business and real estate area.  It will be challenging and exciting.  I still plan on keeping  and posting on the blog.  We are in the process of moving my blogs to a new site under the Curran & Sickal name and I will post the new sites here when completed. 

To those of you who have been patient with my not posting due to the changes taking place in my personal life, thank you.  I hope you will continue to find this blog helpful. 

Keeping Employees A Little Healthier

Did you know that your employees' desk could make your employees sick, especially your women employees?  According to the University of Arizona the bacteria levels of women's desks are nearly three times as high as those on the men's desks.  The reason?  Women munch more at their desks than the men do.  It is suggested that all desks be wiped clean with a disinfectant at least once a week.  The desk, phone and keyboard should also be wiped clean.

Source:  August 2007, Good Housekeeping; Can Your Desk Make You Sick? 

Identity Theft

I took some time out today to look at the August 2007 edition of Good Housekeeping.  Good Housekeeping had an interesting article in it about identity theft.  It was not about your usual credit card and shopping spree theft but about medical identity and social security identity theft or fraud.    Medical identity theft occurs when someone else uses your identity when having medical treatment and this treatment becomes a part of your medical records and the costs of said treatment are charged to you.  An example would be someone who is tested for HIV and uses your identification information.  The HIV test comes back positive.  This positive test goes into your medical records and your insurance company has access to it and uses it against you to prevent re-insuring you, or a future employer looks at it when considering hiring you and determines that you are too much of a risk with HIV.    Once these false medical records are put into your files, it is very difficult to delete them or have them corrected.  Part of the problem seems to be the HIPAA regulations which prevent others from reviewing the records without authorization.  Many medical providers will not let the victim review the files of the person committing the fraud.   

What can you do to help prevent the medical identity fraud?  Good Housekeeping suggests the following:

*Protect your insurance card as carefully as your credit cards.  If it gets lost or stolen, alert your insurance company immediately and request a new number.

*Be selective about where you get care.  Avoid clinics that advertise free exams; they may just want to copy your health insurance information.

*Carefully read over the explanation-of-benefits notices that your insurance company provides.  Make sure you recognize the doctor's names and the dates of treatment - an unfamiliar provider is a big warning sign.  If you rarely see your doctors, call your insurance carrier and ask for an annual summary of all procedures that were paid in your name.

The other identity theft or fraud mentioned in the article is your social security number.  According to Good Housekeeping, the Social Security Administration receives millions of earning reports where the name does not match the social security number.  Sometimes this occurs legitimately, such as a woman who gets married and takes her husband's surname but then fails to notify the Social Security Administration.  Other times it is because of fraud and the perpetrator rarely is caught.  The Social Security Administration rarely investigates any discrepancies in unmatched names and social security numbers but places the suspect documents is a "suspense file" and leaves it there.  This social security number fraud happens not only to adults but also to children or deceased persons.  This type of fraud is also hard to correct, especially for children.  The Social Security Administration will not issue a new number unless the victim "continues to be disadvantaged by using the original number."  Apparently children are not disadvantaged when their numbers are used by others. 

To protect yourself from social security identification theft or fraud, Good Housekeeping suggests the following:

*Use a credit monitoring service (roughly $11 per month), which notifies you within 24 hours if there's unusual activity.  Identity theft expert Frank W. Abagnale, author of Catch Me If You Can and Stealing Your Life, recommends PrivacyGuard, Equifax Credit Watch, and Identity Guard.

*Before you toss sensitive financial documents and those credit card solicitations that come in the mail, destroy them in a micro-cut shredder.

*Don't give out your SSN freely.  'There's no reason the storage center or the dog pound needs to know your number,' says Abagnale.

*Never answer unsolicited phone or e-mail messages about your accounts, even if they sound or look legitimate.

It is a good article.  I suggest you read it.

Source:  The ID Theft - You Haven't Heard of . . . Yet by Amy Engeler, Good Housekeeping, August 2007

Case Review - Breach of Contract

In Harrell, et al. v. Mercy Health Services Corp. three doctors sued Mercy Health Services Corp., a subsidiary of St. John's Regional Medical Center in Joplin, Missouri (St. John's), for breach of employment contracts.  Each of the doctors went to work for St. John's.  Each had at least an initial employment contract that mentioned  an incentive compensation clause.  Dr. Harrell's clause stated: 

(b) Incentive Compensation. [Defendant] shall implement an incentive compensation arrangement for Emergency Department physician employees of the Emergency Department based upon productivity ("Incentive Compensation"). Such Incentive Compensation arrangement shall apply retroactively to the Effective Date, and [Defendant] will provide Physician with a written statement of a compensation arrangement incorporating the Incentive Compensation. Maximum Compensation, as discussed below, may be adjusted as a result of incorporating the Incentive Compensation arrangement.

The other two doctors' employment contracts were similar.  Each doctor left their employment with St. John's before an incentive compensation plan was implemented. 

The three doctors (plaintiffs) sued Mercy Health Services Corp.(defendant) alleging that it had breached their employment contracts and had failed and refused to perform its duty under the incentive compensation plan.  The jury found in favor of the plaintiffs but awarded the plaintiffs zero damages.  The trial court stated thereafter that it believed the verdict was inconsistent and the plaintiffs agreed.  Based upon the evidence presented, the defendant did not agree that it was an inconsistent verdict.  The plaintiffs requested a mistrial but the trial court refused to rule on the motion at that time.   It discharged the jury and took the matter under advisement.  Thereafter the defendant filed its motion for judgment notwithstanding the verdict.  Subsequently the trial court entered a judgment based upon the jury's verdict - judgment for the plaintiffs but zero damages.  The plaintiffs filed a motion for new trial and the defendant filed a supplemental motion for judgment notwithstanding the verdict.  The trial court overruled both motions.

On appeal the plaintiffs alleged that the trial court erred in not ruling on their motion for mistrial prior to discharging the jury because the discharge before the ruling caused the jury to render an inconsistent verdict, and the defendant cross-appealed and alleged the trial court erred in overruling its motion for judgment notwithstanding the verdict.   In addressing the plaintiffs' appeal, the appellate court restated the general rule that an objection to inconsistency in the verdict must be made before the jury is discharged and failure to do so waives  the inconsistency.  In this case the appellate court found that the plaintiffs had failed to request that the trial court order the jury to return for further deliberation and the plaintiffs' failure to request further deliberation  waived the inconsistency.

The defendant claimed that there was no evidence of mutuality of agreement regarding the incentive compensation arrangement.   The appellate court agreed and stated that to make a submissible case for breach of contract the plaintiff must establish: (1) mutual agreement between parties capable of contracting; (2) mutual obligations arising out of the agreement; (3) valid consideration; (4) part performance by one party; and (5) damages resulting from the breach of contact.  In this case the appellate court found that the parties reserved the essential terms of the incentive compensation agreement for future determination and there was no mutuality of agreement because the parties did not mutually assent to the terms.  It further stated that if the essential terms of the contract are reserved for future determination, as in this case, there can be no valid agreement.

The judgment was reversed  and the case remanded with instructions to enter judgment for the defendant.

Source:  Harrell v. Mercy Health Services Corp., SD27401 & SD27403, 07//10/2007

Case Review - Mechanic's Lien vs. Tort & Breach of Contract

The Missouri Supreme Court held in George Weis Co. v. Stratum Design-Build, Inc. that a plaintiff seeking relief under breach of contract or tort against persons or entities and not real property does not have to join  suit with other claimants seeking to recover on a lien against the property under section 429.300, RSMo.

George Weis Co. (Weis) was a drywall subcontractor on a construction project  where  Stratum Design-Build, Inc. was the general contractor.  Weis was not paid for its work and sued the general contractor and others.  Based upon motions filed by the defendants, the trial court dismissed Weis' petition for lack of subject matter jurisdiction, stating that section 429.300 required that Weis raise its claims by intervening in a prior mechanic's liens brought by other subcontractors.

The Supreme Court held that the mechanic's lien statutes apply to claims against property, not persons.  The purpose of section 429.300 is to enforce multiple mechanic's lien claims filed against the same real property and to adjudicate the rights claimed under the statutes in the property.  Section 429.300 only requires that all mechanic's lien claimants bring their claims in a single action and it does not require Weis to join in the mechanic's lien action because it was not bringing a lien action against the property.  It reversed the trial court's judgment and remanded the case.

Source:  George Weis Co. v. Stratum Design-Build, Inc., SC88194, 07/06/2007

Can You Defend Your Business Under the 'Castle Doctrine?'

Missouri's Governor Blunt has signed Senate Bill 62, better known as the "Castle Doctrine."  This bill allows persons to justifiably defend themselves without fearing criminal prosecution or civil suits.  I have posted a more detailed article on this bill and the questions the bill doesn't answer on my criminal law blog.  To read more, go to 'Castle Doctrine' Signed by Gov. Blunt.

Women and Crime

In the April.May 2007 edition of Pink magazine there is an article that addresses the progression of women committing more crimes as they move up in the workplace.    The FBI reports that embezzlement by women increased 80.5 percent from 1993 to 2002 and that the total number of women incarcerated increased 138 percent from 1994 to 2004.  This seems surprising to some people because of the belief that women are more ethical than men.  However, women may not be more ethical than men.  A study conducted by Rita Simon, Ph.D., professor at American University's School of Public Affairs and College of Law in Washington, D.C., studied women and crime and argued that as women move up in the workplace their likelihood to embezzle or commit fraud increases.  Women are not more ethical than men, they just didn't have the same opportunities in the past to commit these types of crimes as men were the ones in charge.

In 1995 women in corporate officer positions at the top 500 American companies was about 8.7 percent.  This increased to 16.4 percent in 2005.  In 2005 women accounted for approximately 45 percent of arrests for forgery and counterfeiting, fraud and embezzlement.   These crimes are costly.  According to the Association of Certified Fraud Examiners:

In 2002, fraud cost corporations 6 percent of their total revenue, or $600 billion.

Executives are 16 times more likely than employees to commit fraud.

About 42 percent of corporate victims recover nothing.  About 23 percent recover less than one quarter of their losses.

Small companies endure disproportionate losses from embezzlement.

Some of the more well-known names of women who have committed crimes and have been held accountable or charges are pending include: 

• Rebecca Hauck -former executive assistant who scammed an estimated $15 million from unwary homeowners with her co-conspirator Matthew Cox.  She was charged with bank and wire fraud, identity theft, money laundering and conspiracy and is serving a 6 year prison sentence, owes $1.2 million in restitution and proceeds from any potential book or movie deal.
• Lea Fastow (wife of Andrew Fastow) - Enron's former assistant treasurer  who has served a 1 year prison sentence for tax fraud.
• Cheryl I. Lipshutz - former CFO of Enron Energy Services  who was charged with violating anti-fraud laws and who has agreed to return $27,150 and pay a fine of $25,000.
• Kathleen M. Lynn - senior vice president of Enron International, also charged with violating anti-fraud laws.  Her case is pending.
• Wendy Feldman - former Rancho Santa Fe stockbroker who deposited clients' checks and wire transfers directly into her own accounts and forged client signatures.  Feldman cooperated with prosecutors and was sentenced to just over 2 years in prison and  restitution of $4.2 million.
• Linda Schrenko - first woman elected to statewide office in Georgia and the first to be convicted of money laundering and conspiracy.  After a plea of guilty she was sentenced to serve 8 years at the Tallahassee Federal Women's Prison.
• Joya Williams - former administrative assistant to the director of Coca-Cola's global brand marketing.  Williams was found guilty of attempting to sell trade secrets to arch rival PepsiCo and faces up to 10 years in prison.
• Patricia Dunn - board chairwoman of Hewlett-Packard, charged with identity theft and fraud charges surrounding Hewlett-Packard's secret efforts to expose board members who were talking to the press.  She has pleaded not guilty and is awaiting trial.
• Martha Stewart.

It will be interesting to see if this trend continues.

Source:  ladies in lockdown by Mickey Goodman, PINK, April.May 2007

Best Cities for Entrepreneurs

The May 2007 edition of  Inc. Magazine contains an article titled BoomTowns '07.  It includes the top cities for entrepreneurs.  To determine the top cities the magazine examined job-growth data, current-year employment growth, average annual job growth over the past three years, comparison of job growth in the first and second halves of the period comprising the past 10 years, and job growth by industry sector.   

The top 10 cities overall include:  St. George, Utah; Yuma, Arizona; Fort Myers, Florida; McAllen, Texas; Naples, Florida; Las Vegas, Nevada; Sarasota, Florida; Morgantown, W. Virginia; and Bend, Oregon. 

The top 10 large cities include:  Las Vegas-Paradise, Nevada; Phoenix-Mesa-Scottsdale, Arizona; Fort Lauderdale, Florida; Orlando-Kissimmee, Florida; Riverside-San Bernardino-Ontario, California; West Palm Beach-Boca Raton, Florida; Raleigh-Cary, North Carolina; Honolulu, Hawaii; Northern Virginia; and Salt Lake City, Utah.   

The top 10 mid-size cities include:  Cape Coral-Fort Myers, Florida; McAllen-Edinburgh-Mission, Texas; Sarasota-Bradenton-Venice, Florida; Fayetteville-Springdale-Rogers, Arkansas; Deltona-Daytona Beach-Ormond Beach, Florida; Lakeland, Florida; Provo-Orem, Utah; Reno-Sparks, Nevada; Boise City-Nampa, Idaho; and Savannah, Georgia.

The top 10 small cities include:  St. George, Utah; Yuma, Arizona; Prescott, Arizona; Naples-Marco Island, Florida; Morgantown, W. Virginia; Ben, Oregon; Laredo, Texas; Port St. Lucie-Fort Pierce, Florida; Las Cruces, New Mexico; and Coeur d'Alene, Idaho.

For the Missouri-Kansas-Oklahoma-Arkansas area it includes only Fayetteville-Springdale-Rogers, Arkansas (#4 on mid-size) and  Springfield, Missouri (#20 on mid-size).  Florida seems to have the majority of cities more open to entrepreneurs.  You might consider this when determining where to open your next business.

Source:  Inc., May 2007, BoomTowns '07 by Joel Kotkin/Rankings by Michael A. Shires

Case Review - Second Injury Fund Liability

In the case of Portwood v. Treasurer of the State of Missouri-Custodian of the Second Injury Fund, Mr. Portwood contended that the Second Injury Fund was liable for a latent preexisting disability that became symptomatic after he was injured while on the job.  Mr. Portwood's job injury resulted in a 25% permanent partial disability to the right upper extremity at the shoulder.  After this injury occurred, Mr. Portwood learned that he had a preexisting condition in his cervical spine known as a Klippel-Feil deformity.  Prior to the work injury he had no knowledge of this condition, it did not result in him losing work, and it was not a hindrance or obstacle to his employment.  At the hearing before the ALJ the parties stipulated that should the Fund be found liable, the calculations would be: 15% to the right shoulder at the 232 level, 15% to the cervical spine for the prior condition, and a 10% load factor.  The ALJ determined that the fund was not liable and the Commission affirmed this decision.  Mr. Portwood appealed.

The Missouri Court of Appeals, Western District, affirmed the ALJ's and the Commission's decision.  For the Fund to be liable, Mr. Portwood had to show either that he had a preexisting partial disability combined with a disability from a subsequent injury to create permanent and total disability or that his two disabilities combined to result in a greater disability than that which would have resulted from the last injury by itself.  The preexisting disability must  be that which is actual and measurable at the time the work injury is sustained.  Mr. Portwood's preexisting condition did not qualify as a "disability" at the time of the work injury due to it being undiagnosed and asymptomatic until the work injury occurred, he did not lose work from it and it did not constitute a hindrance or obstacle to his employment before the work injury.

Source:  Gary Portwood v. Treasurer of the State of Missouri-Custodian of the Second Injury Fund, Missouri Court of Appeals, Western District, WD67140, April 17, 2007

Case Review - Preservation of Property by Estate

In In the Estate of Pauline Shaw v. McKown the devisees of a Will attempted to have the Estate of the decedent reimburse them for the expenses they expended in repairing and improving the real property they were to receive under the Will.  The decedent, Mrs. Shaw, owned 320 acres in Missouri.  She lived on one acre and the  McKowns lived on the remaining 319 acres and ran a cattle operation thereon.  The McKowns did not pay rent on the house they were living in but were required to help maintain Mrs. Shaw's house and acre.  The McKowns did pay rent on the land used for the cattle operation.  After Mrs. Shaw died the McKowns were informed by the Independent Personal Representative (IPR) that they were to receive the 320 acres and that the Estate would continue to pay the insurance, taxes and utilities on the property until the Estate was closed.  During the administration of the Estate, the McKowns wanted the IPR to repair the roof on the main house where Mrs. Shaw had lived.  The IPR refused and the McKowns then repaired the roof themselves and also did other repairs and improvements to the property during the time the Estate was open.  Subsequently the IPR told the McKowns that the Estate would be closing and that it was going to stop paying the insurance, taxes and utilities on the property.  The McKowns filed a claim for reimbursement of all the repairs and improvements they had made on the property and for the insurance proceeds that had been paid for damage to the property during a storm during the administration of the Estate.  The trial court granted the McKown's motion on the insurance proceeds but denied all other claims.  The McKowns appealed stating that the IPR was required to maintain and preserve the property under sections 473.803 and 473.810, RSMo.

Section 473.803 provides that the personal representative has the right to and can take possession or control of the decedent's property or the personal representative may leave the property with or surrender the property to the person to whom the property has been left to in the decedent's Will.  The personal representative must pay the taxes and take all steps reasonably necessary for the management, protection and preservation of the estate in his possession.  Based upon this statute, the McKowns had to show that the IPR had possession of the real property and that the repairs were necessary to preserve the property.  The McKowns failed to prove these two things.

In determining whether the IPR had possession of the property, the appellate court looked at section 473.260 which provides that a decedent's property devolves to the person to whom it is devised at the moment of death; the devisee possesses the real property immediately upon the decedent's death.  The court held that the McKowns held the property subject to the possession by the IPR to defray administration expenses.  Further, section 473.263, RSMo, requires that the IPR has to  affirmatively act to take possession of the property and failure to do so allows the property to remain with the devisee.  The IPR did not affirmatively act to take possession of the real property and the actions of the McKowns by making the repairs and improvements on their own conclusively resulted  in their having the possession of the property and not the IPR.  Further, the McKowns had failed to pay rent on the cattle operation land to the Estate after Mrs. Shaw's death. This also showed that the McKowns had possession of the property and were treating it as if they owned it already.

The appellate court also concluded that even if the IPR had taken possession of the real property, there was not sufficient evidence to show that the repairs and improvements were made to preserve or protect the property.  In fact, the court concluded that the repairs and improvements were made to the McKowns' own benefit and convenience.  The court concluded that the trial court did not err in denying reimbursement to the McKowns for the repairs and improvements they made to the property.

Source:  In the Estate of Pauline Shaw v. McKown, Missouri Court of Appeals, Western District, WD66590, April 10, 2007