Economic Relief During COVID 19 Crisis

Economic Relief for Small Businesses During the 2020 COVID 19 Crisis

By: Zach McCormick
Date: April 14, 2020

The federal government has announced two economic relief programs which may be used to assist small businesses during the COVID 19 crisis.

The first is called the "Economic Injury Disaster Loan" (aka the "EIDL") and the second is called the Paycheck Protection Program (aka the "PPP").

This is the summary of these two programs.

The EIDL is for non-payroll expenses caused by the COVID 19 emergency and is capped at $25,000 per applicant. Of this sum, up to $10,000 may be procured as a forgivable "advance" and each disbursement is based upon how many employees (not independent contractors) the business has. Each business applicant is eligible to receive $1,000 per employee and this total sum may then be forgiven (though the mechanism for how forgiveness will occur is as yet unknown). For example, if a small business with 5 employees applies for an EIDL loan of $25,000, it will be eligible to receive a $5,000 "advance" which is eligible for forgiveness provided the funds are used for proscribed purposes (i.e. for non-payroll expenses and not profits or expansion of the business).  The remaining $20,000 will be issued from the Small Business Administration (SBA) in the form of a loan to the business directly (no private lender is involved).  This money will have to be repaid under comparatively good terms.

The PPP loan is handled through local private lenders (so go to your local bank for information on how to get this type of loan).  The PPP is designed to help with payroll costs only. These costs are to be determined (generally) by using the average payroll costs from the preceding year as a guide to how much money to apply for through this program. The cap for these loans is 2.5 times your last year's average payroll costs. This figure is based upon the number of employees who were on the small business's payroll  as of February 15, 2020 and while there is a provision for 're-hiring' those who have been laid off due to the COVID 19 outbreak, these funds cannot be used to add employees that were not already on the rolls before this point. NOTE: Although an independent contractor may  apply for a PPP loan, Subcontractors cannot be counted as "employees" for purposes of calculating the business's payroll expenses.

It is also important to note that certain prohibitions exist for business that cannot be open (such as those within closed spaces such as shopping malls).

While the general goal of both the EIDL and the PPP are substantially to help small businesses deal with the economic harm that the various government-mandated shutdowns have caused, they also share the common requirement that  a borrower prove what the funds were used for in order to enjoy forgiveness for them.  For this reason the best practice when seeking to procure this money is to set up separate bank accounts for each loan/grant. I.e. open one account for your EIDL funds and on for your PPP funds. In this manner the monies from each can be accounted for easily without co-mingling them.

On a final note, while there is certainly a good deal of uncertainty surrounding the specific rules related to these two programs, any borrower should assume, as always, that it will be required to account for the use of all of the funds procured. For this reason great care should be taken to ensure that all expenditures of these funds are bona fide and defensible and that all representations on the various applications are truthful and accurate.

As this is an unprecedented time, it is important to note that the rules for these programs is changing day-by-day and it is prudent to check the SBA's website for updates on these issues.

If you have questions about these matters or others, you may contact my office to set up a virtual telephonic (or Zoom) consultation and I will be happy to analyze your business's current situation.

What To Do When You've Been Served With a Lawsuit in Florida

By: Zach McCormick
June 11, 2019

If you have been served with a lawsuit in Florida you generally have 20 days to file some type of response. (See Florida Rule of Civil Procedure 1.140) This may include filing a motion to dismiss the lawsuit (usually on technical grounds), a motion to change venue (location of the suit) or simply an Answer (which is the formal name for your reply to the allegations against you). If you fail to respond within this window you may find yourself on the wrong end of a default action and that is definitely something to avoid. 

One of the biggest mistakes that I see regularly is people putting off dealing with the issue because it is unpleasant to think about. In other words, it is very easy to pretend the problem doesn't exist and hope that it goes away. However, in Florida, the problem only gets worse if you fail to respond  to a lawsuit and undoing the damage is not always possible. 

Another common pitfall is failing to realize that calling a good litigation attorney is just the first step. In my office, it is rare for a client to be able to get an appointment with me on the same day (or even the same week) that they call and I would venture a guess that the same is true in most experienced civil trial firms. This means that 'on-time is late' because hiring an attorney the day before the Answer is due deprives your counsel of the ability to properly respond to the allegations. The best practice is to build in some 'lead-time' so that your lawyer can  gather the necessary facts to form a viable defense strategy. 

There are a lot of tools that a good civil trial lawyer can use to fight back against a lawsuit but if a client comes to me late in the game, many of those valuable tools stripped away. Hence,  the best approach is hit the problem hard and early. There is nothing that will make the pain of learning that you've been sued go away completely. However, many of my clients report feeling immensely better after having retained me than before when they first came in and it makes sense for them to feel this way. After all, hiring a professional to do a job right is about the best thing anyone can do in a tough situation. 

Venue - Where Can I Sue Someone in Florida?

By: Zach McCormick
Date: June 11, 2019

In Florida, a person or business must be sued in their home county, where the "cause of action accrued" or place where the business is registered or property is located unless the parties agree otherwise. (See Florida Rules of Civil Procedure 47.011 and 47.051). 

An agreement otherwise (also known as a venue or forum selection clause) is extremely important because it can mean the difference between having a 'home-court advantage' and having to drive hours across the state to attend court or hire an unknown attorney in a city that is foreign to you. 

I have personally seen where a client made the logical (though incorrect) assumption that they needed to designate venue as being the county in which the defendant resided when they did not have to. It truly was a situation where they came so close to putting together a good contract but missed out on something that could have dramatically aided them in their negotiations. 

Non-Compete Agreements in Florida

By: Zach McCormick

June 10, 2019

Many people have heard of "non-compete agreements" but very few people know that these contracts must include specific language to be effective in Florida. Some states have found that such agreements run contrary to public policy and will not enforce them. However, Florida does enforce these documents so long as they are "reasonable" and specific as to the essential elements.  The problem is that these are subjective terms and their meaning varies from person to person. Thankfully, there is some guidance in   Florida Statute 542.335 and here are the bullet points for a valid non-compete agreement:

• Has to be written down and signed. 
• Must describe the what, when and where a person is prohibited from working.
• Must be to further a "legitimate business interest" (and cannot merely be a way to stifle competition). 
• Timeline for valid restriction ranges from 6 months up to 10 years depending on employee's role in company.

This particular statute is quite lengthy and detailed and it is a 'must read' for anyone who is dealing with this sort of issue. In point of fact, a failure to follow the guidelines in the statute could invalidate or otherwise 'de-fang' what might have been a viable non-compete agreement. Additionally, there is case law (decisions by courts) that touches on the issue. Hence, each case relating to these documents is very fact specific and having a good lawyer review or draft one can make all the difference. 

Remember Your Tax Stamps!

Remember Your Tax Stamps!
By: Zach McCormick
Date: September 7, 2017

As Hurricane Irma bears down on Florida, preparation is key.
There are several stages of storm prep and, after physical safety, food and water, citizens are well advised to secure their important documents against the effects of the storm.
Because of how necessary tax stamps (proof of "Tax Paid" for the transfer of NFA governed property) are to lawful NFA ownership, they should not be overlooked during the storm prep process.

The best practice is to put these forms in something watertight like plastic food containers or bags. Even if the stamps are secured in a safe, it is prudent to wrap them in something that keeps the water out because many safes are not actually waterproof and the water can destroy whats inside even if the door is locked.

That said, don't fret if you've forgotten or lost your stamps. As long as you promptly notify the Chief of the ATF branch that issued your stamp of the loss via an affidavit, you should be able to get a "certificate in lieu of the lost or destroyed stamp" (See 27 CFR Section 479.37). This document is essentially as good as the original as it is basically a 'certified copy' of proof that you properly registered your NFA item.

Because it is the obligation of any lawful owner of NFA governed property to produce proof of registration to a duly authorized BATFE ("ATF") agent upon request, it is essential to have either the original stamp or at least a certified copy of it. As to the question of whether regular (non agency issued) photo-copies will suffice, the answer is, "yes and no". Yes, it will probably help you avoid local legal problems with local agencies but no in the sense that the obligation of owning NFA property requires that the actual proof of payment of the transfer tax be made (upon request by the ATF). Therefore, you will definitely need one or the other (original or ATF issued certificate in lieu of...) to be in total compliance with the law.

As always, make sure your physical safety is ensured before concerning yourself with these issues. However, once you and your loved ones are safe and sound, don't wait to get these matters well in hand.

Related Article: "Concealed Carry in Florida Without A Permit During a State of Emergency"

ATF Changes its Stance on Pistol Arm Braces...Sort Of...

ATF Changes its Stance on Pistol Arm Braces...Sort Of...
By: Zach McCormick
April 25, 2017

My favorite firearm blog (The Firearm Blog) published a story on how the ATF  has changed its opinion on what happens when a citizen shoulders a pistol with an arm brace on it. Sort of...

The short version is that nothing has really changed. 

The long version is that, if the article and purported "open letter" are accurate, then "incidental, sporadic or situational use" of a pistol with an arm brace "at or near the shoulder" is not, NOT ok.

If you find yourself re-reading that sentence and rubbing your head you're not alone because the ATF's "opinion" is about as clear as mud.  The reason for the confusion is that the ATF didn't say "all pistol arm braces can be shouldered and its ok".  Instead, this new opinion says that the widely held interpretation of their 2015 opinion (which concluded that shouldering an arm braced pistol "re-configured" the pistol into an NFA regulated item) is "incorrect and inconsistent with the ATF's interpretation...".

The ATF's "clarification" goes on to state that although shouldering a pistol (with the SB Tactical arm brace) may not be itself a re-configuration that requires a tax stamp, certain other "affirmative steps" will place an item under the purview of the NFA. Unfortunately, little specific direction is provided as to what those steps are. Instead the letter states in part the following:

"If however, the shooter/possessor takes affirmative steps to configure the device for use as a shoulder-stock, for example, configuring the brace so as to permanently affix it to the end of a buffer tube, (thereby creating a length that has no other purpose than to facilitate its use as a stock), removing the arm-strap, or otherwise undermining its ability to be used as a brace-and then in fact shoots the firearm from the shoulder using the accessory as a shoulder stock, that person has objectively "redesigned" the firearm for purposes of the NFA".

Unfortunately, no definition of what "permanent" means is given in the letter and that matters because most of the arm braces are no more or less "permanently" attached than a run-of-the-mill rifle stock (i.e. held in via retaining pin, screw  etc...). Further, no direction is provided on what the ATF considers to be the 'magic' length that makes a pistol brace modification unlawful.

The one clear point is that removal of the arm-strap from the SB Tactical brace is a "no-no" in the ATF's view. However, right after that one point of real clarity the letter writer uses the ambiguous catch-all that anything that "otherwise [undermines]" the brace's ability to be a brace is not ok. Though its only "not ok" if the user shoulders AND shoots the firearm.

Again, if your head hurts you are forgiven because this does not make any sense. This is clear when one asks some simple questions. For instance, what is the magic length for an arm brace to be legal? Wouldn't it be ironic if the ATF found a pistol with a lengthy arm brace to be an NFA governed item while simultaneously deeming a rifle of comparable length to fall outside the NFA?

 Further, although this opinion seems to only apply to the SB Tactical arm brace (aka the Sig Arm Brace) not all arm braces have straps. How then would the logic in this opinion apply to similar arm brace devices? If the manufacturer of one device includes straps with the brace but doesn't pre-install them does the item become illegal if the straps are not affixed by the user?

Yet another question arises when one looks at the fact that if a converted arm brace only brace only causes a pistol to become reconfigured IF FIRED FROM THE SHOULDER then it conversely means that a converted but unshouldered device is just fine. It that is true, then we are back to the same "its only illegal if its shouldered" stance that the ATF appears to be trying to distance itself from and round and round we go!

Although this opinion letter was ostensibly designed to 'right a wrong' it seems more likely that the ATF has been trying to figure out what to do with itself after opening the flood gates on arm braces. This letter may have been a reaction to the vagueness and the uncertainty that has pervaded the firearms community with respect to this issue and it may also have been an effort by the ATF to retain its de facto status as law maker in this area. After all, what is the actual  legal weight of an "opinion letter" like this in court?

What authority the ATF's "opinion letters" carry is a nuanced topic and cannot be properly addressed in full within this article. Suffice it to say that the question has not been fully answered in the federal court system and it is just possible that the ATF is ok with that.

In conclusion, if you are interested in remaining outside the "zone of danger" with respect to arm braces on pistols, you can choose not to shoulder them. However, it seems inevitable that a new wave of youtube videos will be hitting the internet featuring people that are letting their shoulders get cozy with pistol mounted arm braces.

An Infamous Day

An Infamous Day
By: Zach McCormick
December 7, 2016

Many have seen American flags flying at half-mast today and wondered why. In fact, Old Glory has been brought earthward in remembrance of the Japanese surprise attack on the US Naval base at Pearl Harbor, Hawaii on December 7, 1941. The next day, President Franklin D. Roosevelt accurately asserted that this date was one that would "live in infamy".  On December 11th, 1941, the United States Congress did what it has never done since and issued a formal declaration of war against Germany, Italy and Japan (Axis powers).

The Greatest Generation quickly rallied and young men trooped off to battle in a campaign that would claim nearly a half million American lives. This blood-soaked conflict not only led to the downfall of the Axis powers but exposed to the world the atrocities of their respective regimes. The world experienced a new kind of horror when the unthinkable cruelty of the "National Socialists" (aka NAZIs) was uncovered in the concentration camps and elsewhere.

As with all of history, these events have begun to fade from the collective consciousness.
However, there are profound lessons to be learned from not only the conflict years themselves but in the time leading up to the war itself. In those decades, the seeds of discord were sown in ways that are eerily similar to the conditions today.

In an effort to avoid repeating mistakes of the past let us take a short moment to think about why our flags are flying low and why it is so important that we remember this infamous day.