Two of the changes I find particularly interesting. First the “Grants for wellness programs”, on the surface, appears to be a wonderful idea IF at some point we are actually able to access an application AND any of the $200 million, which isn’t much, is actually available by the time the government gets through processing our application (yes we actually intend to make a run at this.) We will keep you posted as to results.

The other change regarding “W-2 reporting” should create a great deal of concern for anyone paying attention. My perception, as well as many other professionals, is that this is a prelude to actually taxing health care benefits. So while Obamacare is supposed to be a win, I’m afraid that most of us will consider it otherwise once the existing administration realizes (through this reporting change) what they can grab in added tax dollars once the reporting is in. Realistically, what was once a wonderful tax free fringe benefit will now get taxed as ordinary income.

See Barbra’s article at Tax Rules You Should Know About for 2011

This article was written by Gary Field, CPA at Numerico, PC. Click here to view Numerico’s website.

A $14.9 Million verdict was recently overturned by the Michigan Supreme Court.  The Supreme Court determined that there was error on part of the trial judge in the jury selection process.  The Michigan Supreme Court also inferred in its opinion that the trial judge overseeing the case could be in hot water with the Michigan Judicial Tenure Commission as a result of his conduct.

This case arose out of an auto accident on an icy road while Anthony and Shirley Pellegrino were riding as passengers in an airport shuttle.  Anthony suffered severe injuries, while his wife Shirley died.  The only issue at trial was the amount of damages, because the defendant had admitted liability.

Prior to voir dire (the selection and empanelling of the jury) the judge directed the parties that he sought to have a “jury that represented the racial composition of [Wayne] [C]ounty.”  It was a goal of the trial court to use race as a factor in determining which members of the jury pool would be permitted to serve on the jury.

During voir dire, Defendant sought to dismiss an African American female by using a peremptory challenge. In this case, Plaintiff’s counsel objected under the grounds that a peremptory challenge may not be exercised on the basis of race.  Defense counsel argued that his challenge was not racially motivated, and instead was based on the fact that the prospective juror “wanted to excuse Greene because she had been widowed two times and was in the process of grieving over her dead mother.”  The trial court denied Defendant’s right to use the peremptory challenge without making any findings about the Defendant’s motivation.  The trial judge used the prospective juror’s race as his sole basis in determining whether to uphold Plaintiff’s objection.  The judge denied the peremptory challenge in order to maintain his desired racial composition of the jury.

Michigan law is clear that race may not be used as a factor in peremptory challenges, even by the trial court.  The Michigan Supreme Court held that a judge “may not deny a party the use of a peremptory challenge on the basis of the court’s desire to attain a racially proportionate jury.”

The Michigan Supreme Court also discussed the various violations of the trial judge.  Particularly disturbing to the Supreme Court was the fact that the trial judge indicated that “he would continue to apply his own personal view of the law, rather than the law of this state, until ‘either removed from the bench by the disciplinary committee or ordered to have a new trial.’”

The Michigan Supreme Court determined that on retrial, another judge would hear the case.

This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.

“Do you want to eat well or sleep well?”

In this economic environment most business want to cut costs (“eat well”) versus investing additional dollars in professional services. However a great certified public accountant will not only allow you to eat and sleep well but will usually be able to deliver savings that exceed the increase in professional fees.

A few examples of how the right CPA can help your business are as follows:

CPA prepared financials enjoy the following benefits from bankers and lenders over client prepared documents. 1) Greater comfort in CPA financials, 2) higher loan approval rates, and 3) typically lower interest rate.

Tax projections for you and your business:

We have always encouraged our clients to have tax projection. Some of the reasons for this are to avoid any last minute surprises at April 15, as well as doing some tax planning before year end, i.e. changing your accounting method, placing assets in service etc. Projections are extremely important this year due to the higher tax rates that will be in place on January 1, 2011.  Is your CPA doing a projection for you and the necessary tax planning? If not they could be costing you big money.

Harnish’s article does mention a few ideas on how to find a good accountant such as referrals from clients, attorneys and bankers. These are great ways to find a good accountant however you also need to check their background with the various state accountancy boards and license divisions. In Michigan you are able to find out the license status and whether there have been any disciplinary actions taken against the CPA or the CPA firm. To check the status of a CPA in Michigan please click the follow Michigan Department of Energy, Labor & Economic Growth link Verify a License.

To read more from Mr. Harnish’s article please click the following link Accountant 101 Finding the Right Match.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

In General Conference Corporation of Seventh-Day Adventists v. McGill, the Court of Appeals found for the Seventh-Day Adventists in a lawsuit against Walter McGill and the Creation 7^th Day Adventist Church.  This case arose out of a trademark dispute between the General Conference Corporation of Seventh-Day Adventists and Walter McGill, the founder of the Creation 7^th Day Adventist Church.

McGill was originally a member of the Seventh Day Adventist church affiliated with the Plaintiffs.  After a theological dispute, McGill split and formed his own church called “Creation 7^th Day Adventist Church.”

The Seventh Day Adventists had previously trademarked the name “Seventh Day Adventist.”  The Seventh Day Adventists brought suit against McGill for trademark infringement and the Court of Appeals upheld the District Court’s order granting summary judgment in favor of the Seventh Day Adventists.

McGill first argued that the Court lacked subject matter jurisdiction over this dispute because the Court would have to analyze religious doctrine in order to determine which party was the true 7^th Day Adventist.  McGill argued that there could only be one true 7^th Day Adventist and that the Court of Appeals lacked jurisdiction to determine which party was the true Seventh Day Adventist.

Rejecting this argument, the Court of Appeals held that “trademark law will not turn on whether the plaintiffs’ members or McGill and his congregants are the true believers.” The Court of Appeals found that it could use neutral principles of law to decide this trademark case.

McGill next argued that his rights were violated under the Religious Freedom Restoration Act (RFRA).  Specifically, McGill argued that enforcement of plaintiff’s trademarks would violate his free exercise clause because his religion mandates him to call his church the “Creation Seventh Day Adventist”.  Essentially, he argued that although he might be violating the trademark law, his religion required him to do so.

The Court of Appeals also rejected this argument.  The Court of Appeals found that even though an individual is bound by his religion to act or not act, he must still obey the law.  Further, the Court of Appeals found that the RFRA only applies to suits where the government is a party.  The Court of Appeals reasoned that Congress did not intend the RFRA to apply to private parties.

McGill also argued that the term “Seventh Day Adventism” cannot be trademarked.  He argued that the term Seventh Day Adventism referred to a religion and is therefore a generic term, that cannot be trademarked.  The Court of Appeals rejected this argument, finding that McGill could not sustain his burden of proving that the public perceived the term Seventh Day Adventist as a religion.

For these reasons, the Seventh Day Adventists were successful in their trademark infringement lawsuit against McGill.

This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.

A modern variation of a non-compete dispute is currently being litigated in federal court in Minnesota. In TEKsystems, Inc. v. Hammernick et al., No 0:10-cv-00819, the plaintiff (an employer) sought to enforce a non-compete agreement with defendants (its former employees). The plaintiff alleged that the defendants impermissibly used social-networking websites to solicit contacts.  One defendant allegedly “connected” with, and communicated with, certain contract employees on the popular social networking website LinkedIn.

Although the outcome of this pending case is uncertain, employers should consider whether to specifically discuss the use of social media in non-compete agreements. This is an issue which is likely to be the subject of future litigation. We will monitor the TEKsystems case and let you know the results.

This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.

During the discovery phase, Plaintiff gave notice to take the depositions of two high-ranking executives at Toyota.  Plaintiff alleged that the testimony was necessary because one executive had given testimony to Congress regarding the defective acceleration models while the other executive was involved in quality control.

Defendant moved to prevent the depositions arguing that the Toyota executives had not “engaged in or participated in the design, testing, manufacture, warnings, sale or distribution” of the automobile at issue.  Defendant sought a protective order to prevent the depositions.

Prior to the decision in this case, Michigan applied the “apex deposition” rule solely to high-ranking government officials.  The apex rule provides that before a party may take the deposition of a high-ranking government official, the party must show that the government official had superior or unique knowledge and information relevant to the issues being litigated.  The rule also requires that the information sought cannot be obtained by a less intrusive method, such as by deposing lower ranking employees.

The Court of Appeals decision extends the apex deposition rule to high-ranking corporate officials.  Citing public policy, the Michigan Court of Appeals determined that the rule will promote efficiency because frequent appearances in depositions will limit the ability of high-ranking officers to perform their job duties.  Further, the Court of Appeals found that applying the apex rule to corporate officials would “prevent the use of depositions to annoy, harass, or unduly burden the parties.”

The Court of Appeals explained that this rule would not shift the burden for litigants seeking to depose a high-ranking corporate officer.  The burden only shifts to the proponent of the deposition only “after the party opposing discovery has moved for a protective order and has made a showing regarding the lack of the proposed deponent’s personal knowledge and that other discovery methods could produce the required information.”

This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.

The Michigan Arbitration Act (MAA) often provides an efficient alternative to traditional civil litigation.  Parties arbitrate their claims before either a single arbitrator or a panel of arbitrators.  Once a decision is rendered, the parties are bound by the arbitrator’s decision.  The tricky part comes in enforcing the decision.  If the defendant is unwilling to comply with the arbitrators’ decision, the plaintiff must seek confirmation of the award by a court under MCR 3.602(I).  Once a judgment is entered by the Court based on an arbitration award, the judgment can be enforced in the same manner as any other judgment.

A recent ruling by the Michigan Court of Appeals, Jaguar Trading Limited Partnership v. Presler (Aug. 3, 2010), clarified the steps a plaintiff must take in order to enforce or confirm an arbitration award.  The plaintiff simply filed the Michigan Court Form 284, (Binding Arbitration Award), provided by the State Court Administrator’s Office.  The plaintiff did not file a complaint with the Court.  The Court of Appeals held that the plaintiff was in error by failing to file a Complaint.  The Court of Appeals held that a plaintiff must timely file a complaint pursuant to MCL 600.1901 and MCR 2.101(B) in order to invoke the trial court’s jurisdiction.

Future plaintiffs must be aware that simply filing a Form 284 with the trial court is not sufficient.  In order to effectively preserve the rights associated with enforcing an arbitration agreement, plaintiffs must file a complaint with the trial court.  This must be done within one year after the arbitration award in order to avoid any argument that the effort to enforce the arbitration award is untimely.

This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.

Williams and Hartley became romantically involved and began to live together, under the assumption that they would marry in the future.  That assumption proved costly for Williams.   During their cohabitation, Williams and Hartley significantly improved the value of the property in which they lived, which was solely owned by Hartley and her father.  However, when things went sour they separated and Williams sued Hartley to recover the value of his labor and the amount he spent on resources improving the property.

The Court of Appeals determined that Williams was entitled to receive nothing for his efforts.   The law in Michigan provides that services rendered during a non-marital cohabitation relationship are presumed to be gratuitous.  Unless the plaintiff can show that he expected payment from the defendant at the time he rendered the services and, also that the defendant expected to pay for the services, the plaintiff will not be able to overcome this presumption.

Arguments made by Williams such as unjust enrichment, gifts made in contemplation of marriage and quantum meriut were all rejected by the Court of Appeals.  Courts will only enforce non-marital cohabitation agreements made with adequate and independent consideration.  The Court of Appeals held to hold otherwise would be to “resurrect common-law marriage.”  Unmarried co-habitants have no rights to property division in the absence of a specific contract.

This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.

Typically, in the fall of each year, we will book a conference room at a neighborhood hotel for the day. Our retreat starts at 8 AM and ends at 5 PM with snacks and beverages provided throughout the day and of course we break for lunch. On some occasions we have closed the day with a firm provided dinner.

The primary goal of the retreat is to review how we did relative to the goals set at the prior year and to set goals for the upcoming calendar year. We set some very specific goals by function (Administrative, Marketing, Service and Housekeeping) and stay on track with a well thought out, written agenda.

Our retreats always include an outside facilitator who is responsible for leading us through the agenda. This individual is a professional who knows our firm and is a very astute and successful business person. The facilitator keeps things moving, on track and ensures everyone participates.

There is no question that an annual retreat, whether done locally or in another location that doesn’t max out your budget, is one of the best investments our firm and your businesses can make. Take a look at the link below for great suggestions on how to do get the most bang for the buck both locally and in other locations.

To read Shira’s Levine’s article “6 Tips for Planning A Corporate Retreat on a Budget” please click the following link 6 Tips For Planning A Retreat.

This article was written by Gary Field, CPA at Numerico, PC. Click here to view Numerico’s website.

The North Bay Business Journal has an excellent article from Jim Anderson titled “Facing reality, getting real”. He stresses that the new normal is a lack of credit from traditional financing sources, increased business competition and labor issues.

I particularly enjoyed his quote “Any smart business person realizes that the number one asset of your company is the people. If you have not figured that out, I am surprised that you are still in business”

Managing labor is important in this economy; underperforming employees provide average customer service at best. You need world class customer service to survive in this market or your client base is going to take their business elsewhere. In fact eliminating poor performers it not enough, a stronger message is sent when they are not replaced, and that the current employees have to step it up to maintain their jobs.

To read the rest of his article click the following link Facing reality, getting real.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.