Underwood Shareholders Kelly Utsinger and Roger Cox have been named 2012 Super Lawyers for the upcoming Business Edition to be published in September.  Mr. Utsinger will be listed under the Litigation Section – Civil Litigation Defense.  Mr. Cox will be listed under the Business & Transactions Section – Bankruptcy & Creditor/Debtor Rights.  The new Super Lawyers Business Edition, formerly known as Super Lawyers — Corporate Counsel, is a resource that features attorneys selected in 2011 to the Super Lawyers list from 29 specific business practice areas.  For more information about the 2012 Super Lawyers, click here.

The 82^nd Texas Legislature addressed the interrelations of property owners’ associations (POAs) and homeowners vis-à-vis solar power equipment.  House Bill 362 modified the Texas Property Code to prohibit POAs from restricting solar devices.  While this sounds appealing to some homeowners wishing to harness renewable energy, the devil resides in the details.

There are broad exceptions that still allow POAs to prohibit solar equipment located in areas other than rooftops or in a fenced yard or patio.  POAs may still regulate equipment that does not conform to the slope of the roof or is not parallel to the roofline.  There are also specific requirements for support brackets, piping, and wiring.  Finally, even if a homeowner avoids the exceptions of HB 362, a POA may regulate solar energy devices if placement of those devices causes “unreasonable discomfort or annoyance to persons of ordinary sensibilities”.

These are just a few examples of the exceptions contained in House Bill 362.  Interested homeowners may review the bill in its entirety at http://www.legis.state.tx.us/tlodocs/82R/billtext/pdf/HB00362F.pdf#navpanes=0. 

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.

Information presented during the second day of the Wind, Solar and Storage Institute in Austin confirmed in my mind that ERCOT will be adding additional electricity generating capacity in the next few years.  I believe that the requirement of additional generating capacity translates to the need for more wind farms.  This is good news for planned wind-energy projects in the Texas Panhandle that anticipate connecting to the CREZ transmission lines. 

It seems clear that profitable wind energy operations will continue to be dependent upon the Production Tax Credit (PTC), which is currently set to expire at the end of 2012.  Most Institute attendees speculate that the PTC will be extended beyond 2012.  However, that extension is not expected until after the November 2012 elections, possibly late 2012 or early 2013.  While awaiting a decision on the PTC extension, the planning of some projects is being delayed.  These delays could result a decline in the development of wind energy projects in 2013.

A presentation regarding lease terms confirmed that the issues to be negotiated between a developer and a landowner remain virtually the same as they have been for the last few years.  However, while the key lease terms have remained the same, the environment for project development has changed.  The result of this is that developers may now have a different negotiating position due to tighter margins. 

The relationship between wind energy development and natural gas prices was discussed.  It was speculated that natural gas prices may have an effective floor of around $2.50/MMBtu.  It was also suggested that prices in the $4.00/MMBtu range may be expected in the next few years.  One particular speaker noted, however, that, “What I have learned about speculating is that when I speculate, I lose money.” 

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.

Last week, U.S. Citizenship and Immigration Services announced that E-Verify Self-Check, a program that allows job hunters to confirm their employment eligibility status, is now available in every state of the Nation.

Many employers use E-Verify  to confirm their new employees’ work authorization.  Now, employees can use the Self-Check services to determine if there are any discrepancies in their record, and to fix any such problems if necessary.   

For more information, please visit the Self-Check website at http://www.uscis.gov/selfcheck.

Our February 15, 2012 Farming Lawyers presentation enjoyed a quality audience.  We were pleased to brainstorm with a handful of accountants from the leading California accounting firms that specialize in dairy issue.  Also, we shared thoughts with Norman Mullin, president of Enviro-Ag Engineering, Inc.  We share Norman Mullin’s views about increasing water regulations through Texas water districts. 

Lorie Vincent asked the Farming Lawyers and Norman Mullin to share their  information with High Ground members at the  spring meeting.

After our presentation we walked through the dairy pavilion.  Beef cattle displays in the dairy pavilion confirm the significant role dairies will play with the drought-reduced mother cow herd.

The accountants, bankers and consultants with whom we interacted agreed that limited expansion will occur over the next couple of years.  We think we’ll see consolidation.

Te-connecting with accountants, bankers, and, more importantly, our clients was worth the trip.  The Trace Adkins concert and President George W. Bush’s comments were icing on the cake.

The United States Court of Appeals for the Fifth Circuit has issued its first 2012 opinion addressing dischargeability under Section 523 of the Bankruptcy Code.  In In re Shcolnik, the Fifth Circuit reversed a lower court’s summary judgment, finding that there was a potential fact issue regarding dischargeability of an attorneys’ fee award arising out of an arbitration proceeding.  2012 U.S. App. LEXIS 2609 (5th Cir. 2012).

The debtor was a former employee of the creditor.  He had been terminated after asserting claims he was a partial owner of the creditor company.  The creditor alleged that he had “absconded with various documents” and also had engaged in an effort to force a “buyout” of his purported ownership interests, allegedly threatening, among other things, “a massive series of legal attacks…”

In response to those assertions, the former employer initiated arbitration, seeking a finding that the debtor had no such ownership.  The result was a finding that the debtor did not own an interest in any of the companies, and the arbitrator awarded the creditor $50,000 in attorneys’ fees.

The Chapter 7 followed, and the former employer filed an adversary proceeding alleging that the attorneys’ fee award was nondischargeable under Sections 523(a)(4) (defalcation in a fiduciary capacity) and (a)(6) (willful and malicious injury) of the Bankruptcy Code.

The Fifth Circuit found no fact issue on fiduciary defalcation.  The Court noted that although defalcation does not require fraud or embezzlement, but only “willful neglect of duty,” the attorneys’ fee award arose not out of any breach of fiduciary duty, but rather the post-termination threats and campaign of what the Fifth Circuit called “coercion.”

Regarding 523(a)(6), however, the Court cited previous authority under which a debt for sanctions imposed because of a debtor’s pre-petition litigation tactics arose was found nondischargeable.  In re Keaty, 397 F.3d 264 (5^th Cir. 2005). 

In Keaty, the purported harassment was carried out through “baseless litigation” in which the debtor was the plaintiff.  Shcolnik presented somewhat of a mirror image (the litigation was commenced by the creditor); however, the Court found this to be a distinction without a difference.  Taking the facts as presented by the creditor, the Court observed that the debtor “either had the motive to inflict harm or acted so as to create ‘an objective substantial certainty of harm’ to the Appellants.”  In other words, the Court could find that the debtor’s behavior resulted in a willful and malicious injury (the attorneys’ fee award) if his claims of ownership were made in bad faith and “as a pretense to extract money” from the creditor.

For earlier Fifth Circuit authority on Section 523 issues implicated by Shcolnik, see In re Gupta, 394 F.3d 347 (5^th Cir. 2004)(Section 523(a)(4):  misappropriation by persons in traditional fiduciary capacities); In re Williams, 337 F.3d 504 (5th Cir. 2003)(Section 523(a)(6):  “objective substantial certainty of harm or a subjective motive to cause harm”).

*Roger Cox, a shareholder with the Underwood Law Firm, is Board Certified in Business Bankruptcy Law (and formerly Board Certified in Commercial/Real Estate Law) by the Texas Board of Legal Specialization.  Mr. Cox regularly represents lending institutions in foreclosures, workouts, and formal bankruptcy proceedings.  This article is for general information only and is not intended as legal advice.

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.

Sweeping amendments to the Americans with Disabilities Act (ADA) took effect on January 1, 2009, and regulations implementing the amendments were promulgated on May 24, 2011.  Employers who have not studied the amendments and implementing regulations may be surprised at what now constitutes a covered disability.

Let’s say an employee has a history of episodes of debilitating depression, but she has never suffered or experienced an episode of depression while working for you because the medication she takes is effective in preventing these episodes.  Does she have a covered disability?  Yes, even though taking medication can alleviate her impairment, she still has a covered disability.

What if an employee is a cancer survivor who is in complete remission, with no physical or mental impairment from the cancer, would he have a covered disability?  Yes, an impairment that is in remission is still a covered disability.

What if an employer mistakenly believes that an employee suffers from a disability, albeit one that does not substantially limit a major life function, is the employee protected by the ADA?  Yes, if an employer mistakenly believes that an employee suffers from a disability, there is still ADA coverage—even if the employer does not think that the condition is a substantial limitation on a major life function.

Contact Mike H. Loftin at (806)376-5613 for additional information or assistance.

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.

The UTCLE sponsored Wind, Solar and Storage Institute is currently taking place in Austin, Texas.  The Institute began on February 14 and runs through February 16.  The first day of the Institute had a number of interesting presentations.  A common theme seemed to be that the wind industry is in a difficult situation because of the unknown future of the Production Tax Credit (PTC) coupled with the low price of natural gas. 

Presenters provided statistics indicating that about 6,300 megawatts (MWs) of wind generation capacity were installed in the United States during 2011.  The current development projection for the United States in 2012 is over 8,000 MWs of wind generation capacity.  Other statistics showed that the price of wind turbine generators (WTGs) more than doubled from 2001 to 2009.  However, with a number of manufacturers entering the WTG market since that time, the price of WTGs has now fallen.

One of the several panels that presented information on the first day addressed the trends in leases and the impact those trends have on negotiations between landowners and developers.  Many of these trends result from the challenges developers faced (and continue to face) after the economic turmoil of 2008-09.  Three notable trends that the panel identified were (i) longer development terms in leases; (ii) economic terms closer to those typically found in 2004; and (iii) less competition.

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.

Dave Goad, a Shareholder at the Underwood Law Firm, will present at the monthly Panhandle Association of Petroleum Landmen meeting. Mr. Goad will discuss “IRS Issues Concerning Independent Contractor Landman.”   For more information about the meeting and this organization, click here.

On February 7, 2012, the Texas Attorney General released an opinion regarding whether a superintendent who reassigns his/her spouse (also a district employee) is subject to anti-nepotism laws (Chapter 573, Tex. Gov’t Code).

In this particular situation, a board of trustees hired a superintendent’s spouse as a high school counselor, and subsequently adopted a policy delegating its authority to select district personnel to the superintendent.  Was the superintendent prohibited from reassigning his spouse under anti-nepotism laws?  The Attorney General says no.

A main concept from Chapter 573 is to prohibit public officials from exercising appointment or confirmation authority to certain close relatives for public employment.  Under the definition of a “public official,” a superintendent can be precluded from appointing or confirming certain persons for public employment.   After a brief analysis of the definition of “public official” and applying it to the Texas Government and Education Codes, the AG said that a superintendent is a “public official” and subject to nepotism laws only when selecting district personnel pursuant to delegated authority.

The Attorney General, however, made a clear distinction between selecting a person for employment and assigning a person to a particular campus.  The Education Code gives the superintendent authority and responsibility for the assignment of district employees, a power not available to the board of trustees.  Since the superintendent has assignment authority granted by statute, rather than by delegation, a superintendent assigning an employee to a specific campus does not fall within the ambit of a “public official” subject to anti-nepotism laws.

Therefore, a superintendent is free to reassign his/her spouse to another campus in the district and is not subject to anti-nepotism laws for such reassignment.

The opinion dismissed as irrelevant any discussion of the continuing employment exception (§ 573.062 Tex. Gov’t Code) to the anti-nepotism laws since the superintendent is not a public official in this instant.

The full Attorney General opinion is available at:

https://www.oag.state.tx.us/opinions/opinions/50abbott/op/2012/htm/ga0910.htm.

As always, if you have any questions regarding this opinion, please feel free to contact an attorney from the Public Education Law Group.

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.