Maintaining Limited Liability - New Mexico Business Attorneys

You may be in danger of personal liability should you or the business fail to comply with the regulations that pertain to your company's operations.  The following are some key criteria in maintaining limited liability standing. This list is not exhaustive, so if you're looking to form a New Mexico LLC and are concerned about the potential pitfalls, then be sure to contact a New Mexico business lawyer.

Individual Guarantees for Business Obligations

One of the major advantages of organizing an limited liability company is the protection it offers for individual assets.  The managers, members, and officers can be held personally liable for the LLC's obligations and debts in some circumstances, however.  Unless you sign a personal guaranty agreement, a lot of lenders will not offer credit when you begin a company.  Signing such an statement will make you personally liable for the debt or obligation secured.

By taking certain actions you could also take on individual responsibility for the organization's debts or obligations.  An adverse party might be able to “pierce the corporate veil” and make you personally liable for the LLC's obligations if you blend your personal interests or assets with business assets or if you neglect LLC rules and regulations.

In addition to this, it is crucial to diligently review all leases, credit agreements, contracts and equivalent written documents before signing them to be sure that they don't incorporate unseen personal liability representations or indemnification agreements.

Negligence (not to mention willful or intentional torts) might also result in the loss of liability protection for that individual.  If an officer, member, manager, employee or other representative of the Limited Liability Company engages in negligent conduct that hurts someone else they might be determined to be personally liable. Limited Liability Companies should think about carrying liability insurance coverage to safeguard against these types of risks.

Federal Taxes

An Employer Identification Number can be supplied by the Internal Revenue Service when you organize a Limited Liability Company.  Withholding and FICA taxes have to be reported, collected, and paid to the state and federal government as required by law.  The individuals responsible for keeping and paying for these various taxes may be held liable separately from the Limited Liability Company.


Distributions by the Company

Distributions from an LLC to its members are typically disallowed if they would render a company insolvent or when the company's assets are lower than its liabilities. In certain cases, improper distributions may be recovered.  Therefore, it is a smart idea to see whether or not a distribution will be lawful before making one.


Always Use the Entire Company Name for Business Transactions

When conducting business, it is imperative that you use the LLC name precisely as it's specified in the articles of organization.  Accordingly, all letterhead, stationery, receipts, and invoices should be made using the full and genuine LLC name.  A complete title ought to be added beside the signature when signing on behalf of the LLC to make sure that it will be clear the individual is operating as a representative of the Limited Liability Company rather than in his or her individual capacity. If you sign a contract and fail to list your relationship to the LLC near your name in the contract, one could argue that you should be held individually liable as a party to the agreement.

In a similar fashion, if you fail to state your connection with the Limited Liability Company when engaging in banking transactions or signing credit agreements you can be held individually liable for those obligations. The same protocols must be followed when leasing equipment, office space, furniture, vehicles, etc.

Recording and Approving Significant Transactions

Authorization from a manager may be necessary for any important transaction (the operate agreement of the LLC should cover these types of issues). The officers should follow the guidelines of the operating agreement. Alternatively, resolutions could be approved and recorded granting approval. Entering into a financial transaction without the blessing of the LLC might result in individual liability.

This is intended merely as a short overview, and it's certainly not meant to deliver an exclusive checklist of every way a company's limited liability standing could be jeopardized. Never depend on a brief overview on its own when determining the right way to run your company.  If you have any concerns you may want to speak with a business attorney for legal advice.

The Effect of Pre-Existing Injuries on your Personal Injury Claim

Below is an article by Keith Findlay of Baca, Findlay, & Dziak, LLC. Keith handles a variety of legal issues, but focuses heavily in personal injury. If you've been injured, Keith is the right Albuquerque personal injury attorney to help with your case.

The Effect of Pre-Existing Injuries on your Personal Injury Claim

The law does not hold a person responsible for injuries that existed prior to their supposed act of negligence that led to their being liable for such damages. Said another way, if you have a “trick knee” from an old skiing accident and one day you suffer a personal injury due to a treadmill malfunction, you can sue the gym or treadmill manufacturer for your injuries and expenses but you cannot reasonably expect to recover for a surgery to completely repair your previously injured knee. The law will only require that a defendant (or tortfeasor) compensate the plaintiff or injured party for the expenses associated with the injuries that stem directly for their act of negligence.

An area within New Mexico personal injury law that the concept of exclusion of recovery for pre-existing injuries is very active is that of injuries involving soft tissue damage. It is common to have whiplash, back strain and other such soft tissue injuries in car accidents. While injuries such as broken bones are easily attributable to a specific event, soft tissue damage is far more difficult to reliably pin point as far as date of injury is concerned. If the plaintiff in such a case has a documented history of previous neck or back problems, it suddenly becomes far less clear when the specific injury to the neck or back actually took place. This creates significant “wiggle room” for defense lawyers to attempt to minimize the damages attributed to their client.

Naturally, there are varying shades of grey in this concept for attributing liability only for direct injuries caused. If, say, the plaintiff had a history of back problems but had not needed treatment of any kind for many years prior to the event in question the connection between the event and the injury is more clear. However, if the plaintiff had been seeing a doctor regularly for the months immediately preceding the event, then the causation of the back injury is put in question. Perhaps this plaintiff was injured in the car accident, but they are trying to get extra money to treat an injury they had previously suffered. 

The issue of pre-existing injuries in personal injury cases can further be muddled if you consider that many people suffering from such soft tissue injuries can go long periods without feeling pain or needing treatment, only to later find that their injury had caused significant degeneration of the tissue and even greater injury, only much delayed. Even if the plaintiff had not been suffering pain or undertaking treatment immediately prior to the accident, it does not mean that they did not have such degenerative tissue problems from their previous injury, and thus, they may not be compensated for injuries to their neck or back. Because the injury pre-existed, even though it had not been treated for years, means that it was not legally “caused” by the event and thus the plaintiff cannot recover for that soft tissue injury.

It can be treated as a general truth that an injured party will not receive full, 100% compensation for damages relating to their complaint if there existed previous injuries or damage because the defendant would no longer be directly and wholly liable. The practical effect of this is that most personal injury cases that involve at least some pre-existing injuries will settle, or even be adjudicated, at a percentage of the total damages suffered by the plaintiff. If you’ve been injured in an accident, of virtually any kind, do not delay. Speak with your local personal injury lawyer about your situation and learn more about your possible recovery/compensation options. 

Beyond a Reasonable Doubt

Its been a while since I've posted any new articles, fortunately we've been busy at the law firm but here is an article written by my law partner, Keith Findlay:

As a Albuquerque Criminal Defense Lawyer we are frequently asked what “beyond a reasonable doubt” really means. Essentially, reasonable doubt is the standard of evidence that applies in criminal cases (as opposed to a “preponderance of evidence” standard which is applicable in civil cases).

In order to find someone guilty of criminal charges, the prosecuting side must convince a jury (or judge in certain circumstances) “beyond a reasonable doubt” that the person is guilty of the crime they are charged with. The term “reasonable” gives the evidentiary standard some leeway, as the existence of doubt itself is not enough to get away with the committing of a crime. It has to be doubt in the mind of a reasonable person (i.e. claiming “an alien did it!” would not suffice for a reasonable person). New Mexico statutes defines reasonable doubt as: “a doubt based upon reason and common sense - the kind of doubt that would make a reasonable person hesitate to act in the graver and more important affairs of life.”

Generally speaking, a person charged with assault and battery in both a civil (tort) matter and a criminal matter will have a harder time defending against the civil case because the standard the evidence must satisfy is lower in civil cases; an example of these differing standards in action can be seen in the OJ Simpson murder cases. In the criminal case, he was found not guilty beyond a reasonable doubt and acquitted, but in the civil case he was found liable for the murder and forced to pay the family damages under the preponderance of evidence standard.

The rationale behind this important standard of evidences makes sense as the United States is a country that is premised on the notion of “innocent until proven guilty.” The other important consideration is that with criminal charges the stakes are usually considerably higher because people view life and liberty as inherently more valuable than the money that is commonly at stake in civil legal actions.

Just because the standard of evidence is higher in a criminal case does signify that one should take any criminal charges lightly (because, again, the stakes are so high). I always recommend that someone charged with a crime be sure to discuss their case with a local (as the law can vary from place to place) criminal defense attorney to assure the best representation possible.

New Mexico Probate Change 2012

Albuquerque Probate Lawyer on 2012 Law Change

In a recent article we published something regarding the New Mexico Small Estate Affidavit and how it works in New Mexico. One of the important changes to the New Mexico Probate Code here in 2012 increases the amount that the Estate must be under in order to make use of a Small Estate Affidavit. It used to be $30,000, but that amount has increased to $50,000 for people who die in 2012 or later. This change will make it so that families with small estates will not have be burdened by the expenses associated with probate to transfer items of personal property. Again, a Small Estate Affidavit is a useful tool in being able to wrap up a deceased loved one's affairs, but it cannot be used to transfer real estate.

The fact that the deceased person may have owned property at death does not necessarily mean that a probate proceeding will need to be commenced to transfer that property.  In New Mexico there are several ways that land can be transferred so that probate is not required. A Albuquerque Probate Lawyer can tell you if a particular piece of real estate will have to go through probate to transfer ownership.

Of course the key to avoiding probate is talking to an Albuquerque Estate Planning Attorney, who can help you setup your estate in such a way as to avoid probate. With regard to transferring property, an Estate Attorney can advise you how to do so without having to go through probate. Hiring an estate planning attorney that is local is important because where you die controls part of your property, but with regard to real estate, the property (and mechanisms to pass title of that property) is controlled by the State's laws in which it resides. Good planning will help cut down the costs associated with probate, but often more importantly, good planning can cut down on the time factor that a probate proceeding inherently adds. Some transfers of real estate can be setup to happen automatically, which can be important for the heirs in trying to administrate the deceased person's estate.        

Driving While Intoxicated (DWI) and Driving Under the Influence (DUI) in New Mexico

Here is the post I was talking about regarding driving while intoxicated (DWI) and driving under the influence (DUI) in New Mexico. My law partner wrote this article and I thought it was a good follow up to the last article, and this one gives a great overview of what to expect with DWI or DUI charges.

As an Albuquerque criminal lawyer, I know that the crime of Driving Under the Influence (DUI) in New Mexico is a serious charge. In New Mexico a blood alcohol content (commonly referred to as BAC) of greater than .08% or more makes it illegal to operate a motor vehicle. For commercial drivers that limit is further reduced to .04%. A conviction for a first offense can result in significant fines and even jail time depending on aggravating factors. Examples of aggravating factors include:

1. Being found to have a blood alcohol content of .16% or greater (two times the legal limit)
2. Refusal to submit to chemical testing
3. Causing injury to another human being while being unlawfully under the influence of drugs or alcohol

Note that in addition to the penalties listed in the DWI offense chart on our website; aggravating factors in New Mexico carry mandatory jail time, even for a first DUI.

Separate from the criminal sanctions listed above, penalties involving a person’s right to drive are handled through separate Motor Vehicle Department (MVD) hearings. When a person is arrested for a DUI they receive a “Notice of Revocation”. The accused person then has 10 days to request a hearing to contest this revocation. Upon making this request the license will be held within 90 days from the date of arrest. The hearings are conducted at law enforcement facilities and are presided over by a hearing officer.
The issues at this administrative hearing are limited to:

1. whether or not the hearing was held no later than 90 days after the notice of revocation
2. whether the law enforcement officer had reasonable grounds to believe that the person had been driving a motor vehicle within this state while under the influence of intoxicating liquor or drugs
3. whether the person was arrested
4. whether or not the person refused to submit to a test upon request of the law enforcement officer (aggravating factor)
5. the law enforcement officer advised the driver that the failure to submit to a test could result in revocation of the person's privilege to drive; or
6. whether:
   1. the chemical test was administered pursuant to the provisions of the Implied Consent Act; and
   2. the test results indicated an alcohol concentration in the person's blood or breath of eight one hundredths (8/100’s) or more if the person is 21 years of age or older, four one hundredths (4/100’s) or more if the person is driving a commercial motor vehicle or two one hundredths (2/100’s) or more if the person is less than 21 years of age.

The standard of proof that the State must meet for a revocation hearing are much lower than that of the criminal proceedings. The State need only provide a preponderance of the evidence rather than prove beyond a reasonable doubt, making it that much more important to put forth all possible defenses. This can many times be accomplished with the aid of a competent Albuquerque DUI attorney.

Misdemeanor Cases and Your Criminal Defense Lawyer

The following is an article my law partner, who is a Albuquerque criminal defense lawyer, wrote. If you need more information about criminal defense, see our criminal defense practice page on our website. Stay tuned because I will also be posting an article that my other law partner, who is an Albuquerque dwi attorney wrote over the topic of DUI and DWI.

There are two main categories or classifications of crimes: Misdemeanors and Felonies. Misdemeanor charges are less complicated and less serious than felonies, but that does not mean that they can simply be disregarded. Misdemeanor convictions will remain on your criminal record forever and could possibly damage future employment prospects, credit ratings and even your personal reputation. Ideally, you are in a position to be able to afford to hire a criminal defense attorney, enabling you to employ the best defense lawyer in your community. If, however, you cannot afford a private attorney, the court will appoint a public defender to represent you and your interests.

The misdemeanor citation given to you will tell you when you must appear in court. DO NOT disregard this notice. Failure to appear on time for your court date could potentially result in the issuance of a warrant for your arrest. Once you have either hired your defense attorney or one has been appointed to you, you will want to provide any and all information you have regarding your case. The decision to leave out the smallest of details or misrepresent the truth in any way could possibly have disastrous results for you in the long term. Even though a detail or fact may seem small or insignificant to you, your defense lawyer might be able to use that detail in his or her constructed strategy of defense.

Your defense lawyer will serve as your defender and your guide through the labyrinth of the legal system. He or she is trained in the rules of procedure, evidence and courtroom practice. It is precisely this heightened expertise that you are paying for. Your lawyer can dispute evidence or testimony presented against you in court or through statements or depositions. Likewise, your defense lawyer can create a comprehensive strategy for your defense, focusing on jury perceptions, media relations, damage control, and a number of elements of a trial that are often not considered by members of the greater public; most of these higher end strategies are typically used for more serious crimes however. If you are truly innocent, it is your lawyer that is best suited to assist you in show the judge or jury that you are innocent.

The situation can be more clouded if you are actually guilty of the charged misdemeanor. Your defense lawyer will possibly even encourage you to plead guilty if there is an offer for a reduced charge or reduced sentence. That being said, because misdemeanor charges are generally less serious and carry less extensive punishments, these settlement agreements are usually made outside of court and before your actual trial.

It is certainly your option to not hire a private attorney and to not accept a court appointed public defender for your misdemeanor case. This is generally referred to as defending your case “pro se”. However, because you, the accused may not have sufficient experience, information or knowledge about the law, the charges and the procedures of the court, this is not the suggested path to take for most defendants in most situations. Hiring a good defense attorney, even for your less serious misdemeanor charges, may save you time, money and perhaps even your liberty.

New Mexico Lemon Law - Consumer Rights

The other day my aunt had asked me about how New Mexico’s lemon law works. As an Albuquerque business lawyer, I figured that this subject would be of interest to many consumers who have purchased a vehicle in this state. Believe it or not there exists a lemon law with regard to both used and new vehicles. The lemon law comes from the Motor Vehicle Quality Assurance Act (NMSA 1978, 57-16A-1 to 57-16A-9).

With regard to newly purchased vehicles the lemon law applies to new and demonstration vehicles sold by New Mexico car dealers. Basically the law applies to force car dealers to repair all defects which have a substantial impact on the market value and of course the use of the car. The time period to which the law applies is the shorter period of either one-year after which the consumer takes possession of the vehicle, or when the manufacturer’s warranty expires. Basically the law will allow a consumer to be eligible for a replacement or repurchase under the law, if during the one-year period the car has been at the dealership for a total of thirty days or more (this is cumulative), or the car has the same problem repaired four or more times.

NMSA 1978, 57-16A-3.1 applies to used vehicles, and applies to vehicles sold by a New Mexico car dealer. Car dealers must include disclosure of the lemon law in the contract for the sale of the vehicle otherwise the purchaser may cancel the contract. The law provides that used vehicles cannot be sold “as is”; any commercial lawyer would recognize the “as is” language as a disclaimer of warranty, but it does not apply in this context. Additionally the law creates a warranty on the vehicle for the time period of whichever occurs first between 500 miles or 15 days. Once the consumer becomes aware of a problem that limits the use of the car, he or she must return the vehicle to the dealer before attempting to have the car repaired. Failure to follow this key point will make the lemon law inapplicable to the dealer; the essence of this is to give the dealer a chance to repair the problem. The car dealer can charge up to $25 for the first two attempts to repair the vehicle. If a dealer refuses to fix a problem that occurs within the short warranty period, then the consumer can cancel the contract, is entitled to get their money back and if a car was traded in, the consumer can get their old car back. Lastly and obviously, the law does not apply when the problem occurs as the result of abuse, off-roading, racing, failure to maintain required fluids or lubricants and other such operator errors. If you have questions about whether the lemon law applies to your situation, contact one of our Albuquerque attorneys.