Gaining Perspective

by Anthony J. Spotora, Esq.

Six years ago, I opened Spotora & Associates with the state Bar’s blessing and a pocket full of hope. I had euphorically completed the ‘rat race’ they call law school two years prior, and had credentials that extended here and abroad. I worked for a few of the “name brand” Hollywood studios and was anticipating job offers from some prestigious law firms. In fact, I was anticipating a shift into the American lawyers’ dream ~ a position with a national firm, a nice office, a secretary, a parking space, a monthly expense account, and all of the other fringe benefits made available to us “Juris Doctors” after the LSAT’s, law school, the Bar Exam, the Ethics Exam (yes, believe it or not, we have an Ethics Exam), more than $100,000, and some practical experience. So, I was on track – right? I mean, this is how it is supposed to go after all – isn’t it?

On September 11, 2001, tragedy struck our nation and things didn’t look the same. Suddenly, the impressive job with the impressive firm did not look so impressive. (cont. from e-newsletter) In fact, a closer look revealed the requisite billable hours, the sea of attorneys and overwhelming caseload was not a dream, but a nightmare! But WAIT – I had waited 5 years or, rather, all of my life for this offer and when it came. . . it was going to be sweet! And Sweet it was. . .

The first firm left me an offer by voicemail so I could listen to it again and again and play it over the phone for my family and anyone else who cared. The next day, I would call the firm’s managing attorney and, after a moment of jovial banter, I would tell him with cotton mouth and clammy hands, “thank you so much; but, no thank you.” And so I did.

I had business cards printed and began working out of my one bedroom apartment in Santa Monica, CA. I sought the opportunity to play a more significant role in my professional destiny. I wanted to serve as evidence to my clients that a certain caliber of lawyers still existed. I wanted to practice what I preached.

At that time, I was a solo practitioner practicing business, corporate and entertainment law.

I had the assistance of a longtime friend and colleague that allowed “Spotora” to have “Associates.”

Today, Spotora & Associates is a general practice law firm in Century City, CA with a number of talented transactional attorneys and litigators.

Our practice areas now range from business and entertainment law to that of family and criminal law.

During our six years, I have found that we are not only lawyers, but, respectively, we are therapists, counselors, a universal complaint department, confidants, and translators. Of course, we translate the infamous language known as “Legalese,” into “Legal-ease.”

Heartfelt thanks go out to the thousands of men, women and children that lost their lives or have suffered as a result of loss stemming from 9/11 and in turn, gave my professional life perspective.

It is my genuine hope that this newsletter will provide you or someone close to you with some insight and entertainment, whether on a matter impacting your life, or on a dream you hope to pursue.

I sincerely wish you great fortune in all of your personal and professional endeavors!

Kind Regards,
A.J. Spotora, Managing Attorney

Have you ever contemplated what you would do if you were pulled over for DUI? Like a lot of people, you probably have. And amongst your thoughts, did you loosely devise a clever list of ways to outsmart the system? Did your plan include: (1) refusing to take a breathalyzer test; (2) locking yourself in your car or; (3) choking down a handful of breath mints before the officer approached your window?

Well, as you might imagine, those are not only bad choices that can lead to more severe consequences but, the alcohol used in many breath mints can actually increase your chemical reading!

So, what should you do?

Or, better yet. . . what are you LEGALLY REQUIRED to do?

One common misperception is that when someone is pulled over, they must blow into the officer’s breathalyzer machine upon request or demand.

The first noteworthy fact is that this handheld device is NOT a breathalyzer machine. Alternatively, the PAS Device (as it is commonly known) or, the Preliminary Alcohol Screening Device, is a device used by the police to help determine the presence of alcohol in the detainee’s system and supply grounds for the arresting officer’s probable cause – the admissibility of which continues to draw considerable attention.

So what does that mean for you?

(cont. from e-newsletter) Well, unlike the actual chemical test that you must submit to after being arrested, you have the absolute right to refuse to take this on-scene test!

In fact, prior to the administration of the test, the officer is required (by Vehicle Code section 23157(i)) to advise you that:

1. You are being requested to take the PAS test to assist the officer in determining if you are under the influence of alcohol or drugs or a combination of alcohol and drugs;

2. Your obligation to submit to a blood, breath or urine test as required by this section, for the purpose of determining the alcohol or drug content of your blood is not satisfied by submitting to the PAS test; and

3. You have the right to refuse to take the PAS test.

You read correctly! The officer must advise you of his/her purpose in requesting that you take the test, that the test is not the chemical test you must submit to AND, that you may refuse it.

However, as you might imagine, many officers forget to accurately follow this Vehicle Code section or, detainees simply don’t know any better and fear the consequences of not adhering to each request made by the officer.

The bottom-line:

DON’T BLOW IT!
If you are Over 21, Do Not Blow into the PAS Device unless you have NOT been drinking!

So you own your own company! Whether you’re a newcomer to being your own boss or a seasoned veteran, you are calling the shots. Finally! You have big plans and damn it if you’re not going to exceed your own expectations!

You are watching your costs and, although you intended to “do it right” from the start, things have fallen behind a bit and honestly, there is a new priority list – it’s as simple as that! Mind you, you fully intend to maintain your corporate legal formalities – whatever those are – but right now, you’re busy and; not only are you busy but, if business fails to be profitable enough, those legal formalities will become immaterial . . . just as will the business itself. Besides, your corporation provides you with a shelter known as limited liability. So, you’re fine. Right?

Generally speaking, California corporate law encourages business ventures, risk-taking and entrepreneurial activity by limiting the director’s, officer’s and shareholder’s liability for corporate acts. In that respect, the law actually views the corporation as a separate legal “person” so its debts, for example, are personal to it, just as yours are to you.

However, this protection is not absolute and so things can begin to get tricky!

Under certain circumstances, courts will disregard the corporate entity (including LLC’s) and ‘pierce the corporate veil’. (cont. from e-newsletter) ) The result ‘ individual shareholders, directors, officers or members can be held liable for corporate actions. Suddenly, the money in your personal bank account and, personal assets such as your home, can be in jeopardy.

So, under what circumstances may a court pierce your corporate veil or, as it is also known, find that you have utilized the corporation as an ‘alter ago’? Good question!

First, you should know that the alter-ego theory is one of the most commonly alleged equity-based principals and that the common law doctrine of ‘piercing the corporate veil’ is recognized in all 50 states.

To successfully prosecute such a claim, the plaintiff must prove that (i) there is a unity of interest between the corporation and the potential debtor, such that they have no practical separate existence, and (ii) an inequitable result will occur if the corporation alone is held responsible.

In California, courts often consider a list of factors to determine whether alter-ego liability is appropriate. No one factor must be present or is controlling. These factors are generally laid out in Associated Vendors, Inc. v. Oakland Meat Packing Co. (20 Cal.App.2nd 825 and 26 Cal.Rptr. 806 (1962)). When summarizing prior cases, the Associated Vendors’ Court identified a number of possible factors, the most notable of which are:

• Commingling of funds and other assets, failure to segregate funds of the separate entities, and the unauthorized diversion of corporate funds or assets to uses other than corporate uses;
• Treatment by an individual of the assets of the corporation as his own; Diversion of assets from a corporation by or to a stockholder or other person or entity;
• Disregard of legal formalities, including the failure to maintain minutes or adequate corporate/accounting records;
• Domination and control of the corporation by its equitable owners;
• Use of the same office or business location, the employment of the same employees and/or attorney;
• Failure to adequately capitalize a corporation;
• Use of a corporation as a mere shell, instrumentality or conduit for another person or entity; Use of the corporate entity to procure labor, services or merchandise for another person or entity; and/or
• Failure to maintain arm’s length relationships among related entities.

The factors listed above involve factual allegations which are subject to enormous potential dispute. Because of this, ‘corporate veil’ cases are often expensive to litigate!

Therefore, if you own a corporate entity or are considering establishing one, help protect yourself, and your future, by maintaining your corporate legal requirements!

An ounce of prevention could be worth a pound of cure!