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Below is a collection of great Legal Resources and Information Centers including information like: Articles and Frequently Asked Questions written on specific practice areas.

Choice of Business Entity
Which is Best for You?
Corporation, LLC, LP, GP or DBA?

Our office has prepared the following as a general Guide to choosing a business entity. As always there are certain legal caveats that must be set forth at the beginning. Specifically, this Guide has been prepared for informational purposes only and does not constitute advertising, a solicitation, or legal advice. Transmission of the information contained herein is not intended to create, and receipt thereof does not constitute formation of, an attorney-client relationship.

Readers should not rely upon this information for any purpose without seeking legal advice from a licensed attorney in the reader's state. The information contained in this Guide is provided only as general information which may or may not reflect the most current legal developments; accordingly, information in this Guide is not promised or guaranteed to be correct or complete.

State Bar of California
A Guide To Legal Literacy
Understanding the U.S. Legal System

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SO YOU HAVE BEEN SUED
Frequently Asked Questions

Question:
I was not personally served with a Summons and Complaint but my place of employment received a Summons and Complaint, should I ignore it?

Answer: No. You do not have to personally receive a summons and complaint to be served. There can be Substituted Service of legal papers (Summons & Complaint) when the sheriff or process server has failed to locate you personally. For Substituted Service to be valid there has to be a showing of due diligence as well as other items. Even if you believe that you were not properly served do not ignore this. It is better to take action before a default is entered.

Question:
I was not personally served but when I returned to my home I found a Summons and Complaint attached to my front door, should I ignore it?

Answer: No. Although it is doubtful that a process server is able to obtain valid service by simply "posting" a Summons and Complaint on your front door you should not ignore receipt of the Summons and Complaint. You should contact our office or any attorney and advise them of what you have discovered. He or she can then run a check with the Courts or call the apposing counsel to determine if they believe they have valid service.

Question:
If the service of the Summons and Complaint was incorrect, can I simply ignore this? Won't the Courts recognize the invalid service?

Answer: Once again, if you receive a Summons and Complaint or any Legal Documents you should contact our office or any attorney with this information as soon as possible. There are actions you can take to challenge a service of legal papers but, this has to be done in a timely manner. If you fail to take any action and, the Court receives a declaration of proof of service or other document from the process server/sheriff indicating that they have properly served you, the attorney representing the plaintiff would be able to proceed with an entry of your default after 30 days of your alleged service. To challenge the service in a timely manner you should take action before a default is entered.

Question:
Won't the Court simply set a side a judgment entered upon improper service?

Answer: Not automatically. The Court will not automatically set a side a default entered. Unless the proof of service is patently invalid and incorrect and the Court Clerk recognizes this, the Court, will not, on its own accord, vacate a default entered against you. You must take action to challenge the service of process and vacate any default.

Question:
I have been served with a Summons and Complaint. What do I do now?

Answer: After service of the Summons and Complaint you will have 30 days in which to file a response. The response can either be an answer to the complaint or the filing of a law and motion matter often referred to as a "Demurrer". A Demurrer is simply a challenge to the allegations set forth in the Complaint itself. Mark on your calendar the date of your service and mark 30 calendar days after that. This will be the time in which you will have to respond to the Complaint. After you have been served with the Summons and Complaint you should immediately take the Summons and Complaint to our office or to an attorney of your choosing. We can provide you with information and a plan of action to defend the charges brought against you.

Question:
I was served with a Summons and Complaint and the Plaintiff has already entered default against me. Can I do anything to set this aside?

Answer: Yes. If you have failed, for any reason, to file an answer to the complaint within 30 days of the date of service and the apposing side has entered default against you, you will have approximately six months in which to set a side the default. The longer you wait the greater difficulty you will have in setting a side the default. Also the greater cost incurred. Make certain that you bring the entry of default and all papers to our office for our review as soon as possible. If you wait until the last minute then, the cost incurred to proceed with an ex-parte application for extraordinary writ to set a side the default will increase your attorney fee's.

Question:
Can I simply avoid service by hiding from the process server/sheriff?

Answer: It is not advisable to simply try to avoid service. The service of legal papers such as a Summons and Complaint can be obtained by either: Personal Service; Substituted Service; or Service by Publication. If you avoid service and try to prevent the process server from personally delivering the documents to you then the plaintiff's attorney can go to the Court and, upon Motion obtain an Order allowing you to be served by Publication.

A service by Publication will be done in a local paper. You may or may not be aware of the date or time of the service by Publication. Many times Publication notices are placed in newspapers of general circulation for a particular area but, newspapers that are not well known to the general public. This is usually to save cost to the plaintiff. Therefore by trying to ignore or hide from the process server you have created a situation where you will be served by Publication and, in all likelihood, be unaware of the actual date when you were served. The plaintiff's counsel can then proceed with entry of default against you and, it is possible that you will not be made aware of the judgment until after it is entered.

At that point there are actions you can take to set it aside but in doing so those actions will require filling of additional motions and pleadings with the Court resulting in additional costs and, possibly, a judgment remaining against you.

Question:
I admit that some of the allegations and claims in the complaint are true and that I owe the plaintiff some money but not everything that he has pleaded. Do I still have to go to Court?

Answer: There are alternatives to proceeding in Court. These are referred to as Alternative Dispute Resolutions (ADR). However, unless, it is set forth in an agreement between the parties that they will agree to mediate or use ADR, you can not force a party into arbitration or mediation. However, many times, a plaintiff will consider the benefits of arbitration or mediation over a long drawn out Court proceeding and will agree to arbitration or mediation.

Question:
What is arbitration and/or mediation?

Answer: Mediation is normally a non-binding procedure to resolve litigation between the parties. Normally, the parties agree upon an independent mediator who is either a retired judge or attorney. The purpose of the mediation is to resolve the issues and settle the matter.

The cost for mediation is usually paid by both parties equally. The mediation process normally takes place at either the attorney's office or other independent location. There also, are additionally, organizations developed for ADR. The two most common are the American Arbitration Association and JAMS. The American Arbitration Association maintains a panel of Arbitrators/Mediators who, for a fee will here the matter. The JAMS specifically limits their Arbitrators/Mediators to retired judges. If you wish to discuss Arbitration or Mediation or believe this would be a possible resolution to litigation upon which you have been served please contact our office for additional information.

Arbitration, unlike Mediation can be binding. Whether or not you proceed with Arbitration will depend upon if there is an "Arbitration Clause" in the agreement, which is the subject of your litigation. Also the parties, like Mediation, can agree to binding Arbitration. The Arbitration proceeding is slightly more formal and, could include discovery and other civil procedures that you would find in a regular Court proceeding.

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FAILED REAL ESTATE TRANSACTIONS
Frequently Asked Questions

Question:
I was in the process of selling my home and now the buyer has backed out of the transaction. Can he/she unilaterally cancel the escrow?

Answer: The general rule is that escrows can not be unilaterally cancelled. However there are exceptions to this general rule. You should obtain copies of all of your escrow file; purchase contract; any amendments and present them to our office for a review. A brief office consultation should be able to provide you with answers and a procedure to handle the matter.

Question:
Our real estate transaction fell out of escrow. The escrow company is holding my escrow deposit and buyer is refusing to sign release documents. Can I get them back?

Answer: Yes. If the escrow has been mutually cancelled by both buyer and seller, then the escrow company should release the funds to you. If they fail to release the funds to you within 30 days you can proceed under California Civil Code 1057.3 to obtain the release of funds. The cost for the procedure and other expenses, including attorney fees, would be charged to the person failing or refusing to execute the necessary documents to have the escrow funds released.

Question:
I am having problems closing my escrow on the sale of my home. The buyer is refusing to complete escrow and claims that he is entitled to cancel. Do I have to go to Court to force the buyer to complete the purchase.

Answer: Most residential purchase contracts are drafted on California Association of Realtors forms. The standard agreement for purchase contract will contain both a Mediation and Arbitration clause. The Mediation clause requires that the parties mediate the matter before commencement of any action. This would include not only filling suit but proceeding with Arbitration. This clause has been upheld by California Courts and enforced.

If the parties fail to mediate the matter then, the one refusing to mediate after demand has been made to do so, will be denied their attorney fee's and costs even if they are the prevailing party at the time of trial or completion of arbitration. Therefore, it is possible before you commence litigation the parties can be pressed into mediation.

Our office has successfully handled many mediations involving real estate disputes. We obtain the services of retired local judges who acts as mediator. This greatly decreases your litigation costs and fee's, and resolves the matter quickly.

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For more specific information on what you can expect under your unique circumstances, please contact us for a detailed analysis of your case.

If you have a question or want to schedule an appointment, please contact The Law Offices of Paul M. Stoddard. We will respond to your inquiries promptly and confidentially.

Riverside County
Tel:  760-320-8345  or  Tel:  760-776-1150

San Bernardino County
Tel:  909-899-4011

Law Offices of Paul M. Stoddard & Associates expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this Guide.

I. Introduction

One of the most important decisions in the lifecycle of any business is the choice of the business entity for the proposed enterprise. The selection of the proper form of business entity requires a careful balancing of tax and non-tax considerations. In most cases, the choice will be made from among the following alternatives:

• Sole proprietorship, which is relevant only in situations where there is to be a single owner of the business
• General and Limited Partnerships
• Limited liability companies ("LLCs")
• Various corporate forms, including general business or "close" corporations

Other alternative business forms, such as business trusts, registered limited liability partnerships, or professional corporations, are generally only useful in specialized situations; however, if one of these entities is selected for use attention will need to be paid to the specialized statutory regimes established in California and other states. Well-known entities such as joint ventures and Subchapter S corporations are really just special cases of the four business forms listed above. For example, a joint venture may be formed and operated as a general or limited partnership or as a corporation operating under a detailed shareholders agreement.

The process of selecting the proper form of business entity generally requires a comparison of the entities in relation to a variety of distinguishing factors as they apply to the specific business and the requirements of the owners. While each form of business entity has its own unique legal framework and requirements as to formation and operation of the enterprise, many of the historic differences among the entities are eroding.

It is also important to remember that the choice of the business form does not itself guarantee the success of the enterprise, although the improper form may contribute to its ultimate failure. The proper form should provide a means for the participants to achieve the desired results and should not unduly constrain the freedom of the participants to establish a network of contractual relationships that suit their own unique business considerations.

The sole purpose of this publication is to assist business owners and managers in understanding the distinguishing factors among the most common types of business entities and some of the differences that need to be taken into account when selecting the form of entity for a new enterprise. While we believe that this information will be helpful, it should not be relied on as the exclusive resource in making the selection decision and readers are strongly advised to contact professional advisors before proceeding with formation and use of any of the entities described herein.

Also, please be aware that it is assumed that the selection is being made among entities formed under, and governed by, the applicable laws and regulation of the state of California.

For example, any reference to the "Secretary of State" is to the California Secretary of State. State laws regarding business organizations may differ substantially and advice of local experts should always be obtained before selecting an entity that is to be organized under laws other than those of the state of California.

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FILING BANKRUPTCY

You are not alone:

No one "chooses" to file for bankruptcy protection. It is a decision that is forced upon many consumers in these current volatile economic conditions. Many of my clients who have filed for bankruptcy had excellent credit and were financially stable in 2006 and 2007. With the downturn in the real estate market; rise of oil prices and increased cost for food and basic provisions they now find themselves faced with frightening financial times. They are harassed by collection agencies who call at all hours of the day and night and simply want the financial nightmare to stop.

The filing of a bankruptcy will stop all collection efforts including rude and obnoxious calls from creditors and their collection agents.

There have been changes in the Bankruptcy Laws that you should be aware of for they impact your ability to file for Federal Bankruptcy Protection.

Change in the Bankruptcy Laws:

In October of 2005 the Bankruptcy laws were amended. This amendment (Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)) has simply made it more difficult and more expensive for an individual consumer to file for bankruptcy protection under Chapter 7.

The changes in the bankruptcy laws may or may not effect your particular case or situation. We will discuss this with you when you contact our office for a free consultation. Also the changes will have little impact upon a corporation or business filing where the debts incurred have come from the operation of a business (not consumer debts).

Chapter 7 Means Test:

Prior to the enactment of BAPCPA the amount of your income did not impact your ability to file for a Chapter 7 bankruptcy. If you earned $100,000 per year and your expenses were $200,000 per year you would be deemed "insolvent" and, subject to certain exceptions, would be able to file for bankruptcy protection under Chapter 7.

After BAPCPA you must undergo a means test to determine if you "qualify" to file a Chapter 7 bankruptcy.

Means test (Automatic Pass): If your current monthly income is below the California adjusted median income as calculated by the Internal Revenue Service then you "automatically pass" the means test. You are automatically presumed to have filed the bankruptcy in good faith.

The median income is estimated by the number of members in your household (the number of individuals living in your home).

Number of Individuals	Allowed Annual Income
1 2 3 4	$46,814 $61,742 $66,611 $76,931
Thus if you have a family consisting of a husband, wife and child and your annual income was less than $66,611 you would automatically qualify for a Chapter 7

Means test (Not Automatic): If you have a greater income you may still qualify for a Chapter 7. You will simply have to take the "secondary means test". You can contact our office or connect to the web site listed below and insert your information on a secure site. We can then calculate your means test and determine if you can still qualify to file a Chapter 7 bankruptcy.

The secondary means test deducts certain allowable expenses for such items as car payments and other items that are specific to Riverside County Central District (for those filing in Riverside Bankruptcy Court) to determine your qualification.

What happens if I fail both the automatic and secondary means test?

If you do not qualify under either of the two tests then you may still file for Chapter 13 bankruptcy. The Chapter 13 bankruptcy is basically a debt repayment plan.

I want to take the means test can I do it online?

Yes, we have joined with Collier TopForm Web-Based Questionaire program to allow our clients to insert their financial information online. Once the information is inserted you must contact our office at 760 776-1150. We will then schedule an appointment with you and go over our results. The appointment with one of our attorneys is free. There is a charge of $200.00 for the means test that will be deducted from our bankruptcy fee if you pass the means test and decide to retain our office to file your Chapter 7 Bankruptcy.

Procedure for online means test:

1. Link to Collier TopForm Web-Based Questionaire at
    http://www.lexisnexis.com/topformq/login.aspx
   .
2. Enter Attorney ID number:
   MBBK258$8e4460
   The attorney ID number is case sensitive.
   .
3. Once online simply follow instructions and insert your information. The information that is imputed will be used in the preparation of your Chapter 7 bankruptcy filing.

If you have an questions please do not hesitate to contact our Palm Desert office at
760 320-8345

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