This post has nothing to do with business law. Instead, it deals with one of my extracurricular interests, plants native to Indiana.  Specifically, it’s about serviceberries, of which there are several species in the genus Amelanchier.  Serviceberries have been at their peak this last week in central Indiana, as much as two weeks behind those in southern Indiana, and I suspect those in northern Indiana probably trail by as much as another couple of weeks.

Most species of serviceberries grow on small, usually multi-stemmed, trees.  At least one species or another is native to most of the United States and Canada, but they go by several different common names in different regions. In some parts of the U.S., they’re called Juneberries.  In Canada, Saskatoon berries. The old-fashioned southern name that I learned from my grandparents in Tennessee is sarvis berry. Other names for the trees are shadbush, shadblow, and shadwood.  Many of the species are very similar and difficult to distinguish, with identification complicated by the fact that many sold in nurseries are hybrids.  We have four trees in our yard that we bought from a nursery several years ago, and I don’t know what species they are.

Serviceberry trees have become popular for landscaping in the last 20 years or so.  They’re often seen lining sidewalks and outside shopping malls, and they’re good choices for residential landscaping.  Even though they bear fruit, the berries don’t create a mess in the yard, partly because birds eat them so quickly.  In Indiana, the white blooms appear in April.  They’re a good alternative to another native tree that blooms about the same time, flowering dogwood, which is more showy but more difficult to grow in Indiana, the northernmost part of its native range.  According to the Colorado Supreme Court, the leaves of serviceberry trees also make good grazing for sheep.  (Okay, I needed something to connect this post with the law, and that’s all I could find!)

wrigley-field-stadium-in-chicagoI’ve written before about the need for the owners of small businesses to have at least three professionals:  a business lawyer, a tax accountant, and an insurance broker. Because it has been a while, and because the advice is so important, I decided to write about it again. Thinking about a group of three professionals led me to consider analogies to other groups of three people.

The first thing that came to mind was the traditional English nursery rhyme:

Rub a dub dub,

[This post is one in a series written by Smith Rayl’s newest member, Rose Shingledecker.]

Earlier this month, the Seventh Circuit Court of Appeals decided Doermer v. Callen, No. 15-3734 (7th Cir. Feb. 1, 2017). In a previous post, we reviewed the facts and explored what the case had to say about the board of directors and directors’ terms. Today we’ll inch closer to the issue at the center of the case: whether a non-member director of an Indiana nonprofit corporation has standing to bring derivative claims on behalf of the corporation.

But before getting to derivative claims, let’s consider what it means to be a member of a nonprofit corporation. Perhaps you’ve made a donation to a nonprofit in your community and been recognized as an “annual member” for your contribution. Generally it is okay for an organization to refer to its donors and other people who support the organization as members. However, these types of donor membership programs usually do not grant the donor legal or statutory membership in an organization.

[This post was authored by Smith Rayl’s newest member, Rose Shingledecker.]

Last week, the Seventh Circuit Court of Appeals decided Doermer v. Callen, No. 15-3734 (7th Cir. Feb. 1, 2017), a case that illustrates and implicates several important aspects of Indiana nonprofit corporation law. Over the next few posts, we’ll explore some of the key aspects of the case and what it has to say about Indiana nonprofit law.  First up: the board of directors and directors’ terms.

At the center of the case is the Doermer Family Foundation, Inc., a nonprofit corporation formed under the Indiana Nonprofit Corporation Act of 1991 (the “Act”). The initial board of directors consisted of a father; a mother; their son, Richard Doermer; and daughter, Kathryn Callen. Each initial director had a lifetime appointment.

gavel-1238036Last July, the Indiana Court of Appeals decided Rogers v. State, 60 N.E.3d 256 (Ind. Ct. App. 2016), in which the attorney for a criminal defendant had deposed an employee of a charitable organization who held a degree in social work from an accredited university but not a license from the Behavioral Health and Human Services Licensing Board of the Indiana Professional Licensing Agency. The attorney for the organization advised the social worker not to answer certain questions on the grounds that the information was subject to the privilege for communications between a social worker and her client.  The defendant filed a motion to compel the social worker to answer the questions, and the court denied the motion. The court gave the defendant permission to file an interlocutory appeal with the Indiana Court of Appeals, which reversed the trial court’s decision, holding that the privilege does not apply to unlicensed social workers. The State sought transfer to the Indiana Supreme Court, which held oral argument before denying transfer.  Because transfer was denied, the decision of the Court of Appeals is now final.

Ind. Code 23‑25.6‑6-1 provides that, with some exceptions, a “counselor” cannot be compelled to disclose communications with a client.  Counselor is defined by Ind. Code 25‑23.6‑1‑3.8 as “a social worker, a clinical social worker, a marriage and family therapist, a mental health counselor, an addiction counselor, or a clinical addiction counselor who is licensed under this article.”  The question put to the Court of Appeals was one of statutory interpretation:  Does the phrase “who is licensed under this article” apply to all six professions in the list, or does it apply only to the last one, clinical addition counselors?

In arguing that the modifying phrase applied only to the last item in the list, the State relied in part on a canon of statutory construction (i.e., a rule a court sometimes uses as a guideline for interpreting statutes) called the doctrine of the last antecedent, which says that when a list of nouns is followed by a modifier, the modifier is presumed to apply only to the last one in the list (i.e., the “last antecedent”) unless there is a comma between the last item and the modifier.  Because there is no comma between “clinical addiction counselor” and “who is licensed under this article,” the State argued, the phrase does not apply to “social worker.” Therefore, an unlicensed social worker is within the definition of “counselor;” and the privilege applies.

100_3698-300x225.jpgTwo provisions commonly found in commercial contracts, particularly contracts between parties that reside in different states, are a choice of law section and a designation of forum section. The  choice of law section specifies which state’s laws govern the contract, and the designation of forum section specifies the court in which lawsuits that arise from the contract are to be filed and litigated. Examples:

The laws of the state of _______ (without giving effect to its conflicts of law principles) govern all matters arising out of or relating to this Agreement, including, without limitation, its validity, interpretation, construction, performance, and enforcement.

Any party bringing a legal action or proceeding against any other party arising out of or relating to this Agreement shall bring the legal action or proceeding only in the United States District Court for the ______ District of ________ or, if that court does not have subject matter jurisdiction, in a state court of general jurisdiction sitting in ___________ County, __________.

Fair disclosure:  I am entirely unqualified to answer the above question.  In fact, I had never heard of blockchain technology until this morning when I read a blog entry by my friend, John Cunningham, with a link to an article discussing four technological innovations that may affect the legal profession. One of them is blockchain, part of the technology that makes bitcoins possible.  Not only that, but I don’t know a lot more about bitcoins than I know about blockchain.  I do, however, know a little about real property records.

Now that you’ve been warned, if you’re still interested, read on.

What is Blockchain?

Family Cabin
It might come as a surprise to non-Hoosiers that several parts of Indiana are popular locations for vacation cabins.  The best known are probably Brown County and the area around the Indiana Dunes.  Other locales include Lake Maxinkuckee, Lake Monroe, and Lake Patoka; the Amish country and the smaller lakes of northern Indiana; the wooded hills in other parts of southern Indiana; and the small towns on the northern bank of the Ohio River.  Saving the Family Cottage:  A Guide to Succession Planning for your Cottage, Cabin, or Vacation Home, by Stuart J. Hollander, David S. Fry, and Rose Hollander, 4th ed., 2013, is an excellent resource for owners of family vacation homes or other property to be preserved for shared use by future generations.  However, the principles are not restricted to leisure property.  For example, owners of family farms will also find useful advice for keeping the farm in the family for generation after generation.

One of the central concepts of Saving the Family Cottage is to avoid problems of real property owned jointly by several individuals — a situation that, of course, can arise when property is passed from one generation to the next. When property has multiple owners, disagreements between them can result in the property being partitioned. For some types of property, such as undeveloped land, the partitioning may mean that the property is divided into multiple parcels, like cutting a pie into pieces, with each owner receiving a piece of the whole.  In other cases, such as a vacation cottage, a dispute may result in the property being sold and the proceeds divided among the owners.

The authors’ primary solution to that problem — one that we and many estate planning attorneys heartily endorse — is to create a limited liability company to be owned by the family members and to transfer ownership of the property to the LLC. One reason is that transferring ownership of LLC interest from one person to another, unlike transferring ownership of real property, is generally not a matter of public record. A more compelling reason is that the law provides very few rules to govern the relationship between multiple owners of real property (or most personal property, for that matter) and very few mechanisms for resolving disputes that do not result in the termination of the joint ownership.  In contrast, the flexibility of LLCs (which we have touted in this blog multiple times) permits the owners to decide in advance who will make decisions concerning the property and how they will be made and how disputes among heirs will be resolved while keeping the property in the family.

At Smith Rayl Law Office, LLC, we know that many small business owners are looking for affordable resources, information, and strategies to help expand their businesses and reach new customers.

This week, the Martindale Brightwood Community Development Corporation, in partnership with the U.S. Small Business Administration and the Community Resurrection Partnership, is hosting a FREE Business Opportunity Fair.

This event is a great chance to learn about opportunities to grow your small business and how to market your products and services to customers.

ReportsIndiana nonprofit corporations are being converted to a new schedule for filing business entity reports with the Indiana Secretary of State.  In the past, a business entity report has been due every year in the same month in which the organization was incorporated. Nonprofit corporations will now file business entity reports every other year, the same schedule that applies to business corporations and LLCs. The filing fee will double from $10 to $20 for reports filed on paper.  Online filings will cost $22.

The transition began on July 1, 2016, when existing organizations began filing biannual reports and paying the $20 filing fee. Organizations that file a business entity report in July through December 2016 will file their next business entity reports in 2018 and then will continue to file reports in every even numbered year (still in the same month in which they were incorporated). Organizations that file their first biannual report in January through June of 2017 will file their next reports in 2019 and then in every odd numbered year.

New organizations incorporated in an even numbered year will file business entity reports in the same month of every even numbered year thereafter. New organizations incorporated in an odd numbered years will file business entity reports in the same month of every odd numbered year.