Legal Meets Practical

In a last-minute effort to cut red tape at the approach of the end of the Government fiscal year, on September 10th the Center for Veterans Enterprises (CVE) issued a memorandum providing that failure to be listed in the VetBiz Vendor Information Pages is not necessarily a kiss of death as it relates to receiving a contract award.

This memorandum follows a previous memorandum issued on June 1, 2012, which issued a class deviation to Veterans Affairs Acquisition Regulation (VAAR) section 819.7003 . This deviation allowed previously verified SDVOSB/VOSB firms undergoing the re-verification process to compete for an award and have their re-verification “Fast-Tracked.” An official award could not be made, however, until re-verification was complete.

The September 10, 2012 memorandum clarifies the provisions of the prior memorandum and provides that firms that are undergoing requests for reconsideration are also eligible for Fast Track. According to the memorandum, firms that have requested reconsideration of an initial denial remain part of the verification renewal process.

In English, not legalese, these memorandums say that SDVOSBs and VOSBs in limbo with re-verification of status are still eligible for set-aside and sole source awards if: 1) they are currently undergoing re-verification; or 2) they have filed a request for reconsideration.

As it relates to the former, only firms that had previously been verified through the program are eligible. At the time of making an offer, they must have been included in the VetBiz Vendor Information Pages.

As it relates to the latter, to be eligible, the following criteria must apply:

• The contractor was verified on VetBiz when it submitted its initial proposal or offer;
• The contractor subsequently received a CVE denial during the re-verification process;
• The contractor has filed a request for reconsideration on the denial; and
• The contractor is likely to receive contract award.

The fast track approval procedure on reconsideration requests expires October 1, 2012, at the commencement of the next Government fiscal year. For a copy of the memorandum, visit: http://www.sdvosblaw.com/wp-content/uploads/2012/09/R4Rfast%20track.pdf.

On September 15th, lawyers came from all corners of Virginia (and some from Washington, D.C.) to support a free legal clinic for veterans in Virginia Beach. By the end of the day, approximately fifty veterans learned about navigating the Department of Veterans Affairs (VA) disability compensation claims process; the basics of wills, trusts, and estate planning; and the legal and practical considerations involved in starting a small business.

This clinic followed one I spearheaded last April. The first clinic was such a success that a repeat performance was the logical choice. We already had all of the groundwork, materials, and connections – for a fraction of the work required the first time around, we could again positively impact our area veterans.

Only this time, I wanted to expand. While the first clinic addressed only VA disability compensation claims, I believed that we could easily cover other areas of law as well. After discussing the matter with John Kidwell of Kidwell, Kent and Curran, we decided to conduct two additional presentations. Mr. Kidwell was handed the reins for a wills, trusts and estate presentation; and I was charged with a small business presentation.

Like the first clinic, the second clinic was held at the Old Dominion University Higher Education Center. We received sponsorship from Krispy Kreme and Starbucks, and we ran the clinic on tracks: two that focused on VA disability compensation claims (“Navigating the VA Disability Compensation Claim Process”), one that focused on wills, trusts and estate planning, and one that provided veterans the essentials with starting and running a small business. Each track was an hour and a half long, and helpful materials were distributed to all attendees.

The purpose of the clinic was simple: to provide veterans with practical advice they could use, as it related to legal issues. From my experience, the main gripe with lawyers is their inability to speak anything other than “legalese” –  the special language used by lawyers fused with words like “adjudicate” instead of “decide,” “mandamus” instead of “mandate,” and Latin words and phrases that are dead in any context other than law. Since I knew that speaking over someone’s head doesn’t help or educate them, my goal was to make the materials and the presentations as user-friendly as possible.

I truly feel that we achieved this end, and that every single veteran who attended the clinic received value from it. As a veterans advocate, I found this incredibly rewarding. Those who served our country deserve to have their rights and interests protected, and I was honored to use my law license to further that goal.

As a note, the Virginia bar does not mandate pro bono work. Events such as this one show that some attorneys don’t need a rule in place in order to make such an effort. These attorneys, those who forfeited a beautiful Saturday to provide their support, are as follows: Jeany Mark and Kathy Lieberman of Lieberman and Mark; Daniel Krasnegor and Nancy Foti of Goodman, Allen & Filetti; Major Tracey Holtshirley of the U.S. Marine Corps; solo practitioner Jasmin Nunez; and John Kidwell of Kidwell, Kent & Curran.

If you did not attend our clinic and are interested in receiving the materials associated with any of the topics, please reach out to me at [email protected]. I am more than happy to provide electronic copies.

Did you find this article informative? If so, sign up for my weekly blog on veterans issues and updates at: https://legalmeetspractical.com. Make sure to click the link sent to your email to activate your subscription!

Attorneys Sarah Schauerte and Jeany Mark

Attorney John Kidwell conducts presentation on wills, trusts and estate planning

Some people think that once a corporation or limited liability company (LLC) is formed, the individuals who own or manage these entities are completely protected from personal liability. This isn’t entirely true. Certain business actions can pop the bubble protecting these individuals, leaving them exposed in their personal capacity. This is called “piercing the corporate veil,” and you do not want that to happen to your business.

In general, a corporation or LLC is recognized as having a separate existence from its individual owners and officers. Consequently, the assets and liabilities are owned by the corporation or LLC itself and not by the individual owners. This means that a creditor usually can’t go after an individual shareholder or member/manager to satisfy a judgment against the entity.

In rare circumstances, a court will make an exception and issue an order to pierce the corporate veil. In Virginia, for example, the Supreme Court has held that such an order is an “extraordinary” remedy. It will be done only if the individual owner has “controlled or used the corporation to evade a personal obligation, to perpetuate fraud or a crime, to commit an injustice, or to gain an unfair advantage.” O’Hazza v. Executive Credit Corp, 246 VA 111, 115 (1993).

There is no one circumstance that will lead a court to pierce the corporate veil. Several factors are considered when determining if a corporation functions as an alter ego for its owners or was created to advance an individual’s private interest or commit fraud. These factors include:

• A Lack of Corporate Formalities – If a company/corporation fails to file annual reports with the state, pay annual dues, maintain minutes of meetings as required in its By-laws or Operating Agreement, or keep adequate corporate or financial records, this constitutes a failure to adhere to corporate formalities.
• Commingling of Assets – A court may find that personal and corporate assets were commingled if the company/corporation fails to keep a separate set of books and financial accounts, or if the owners of the company/corporation used corporate money to pay personal debts.
• Inadequate Capitalization/Corporate Assets – If a company/corporation is undercapitalized at the time of a transaction and when the creditor attempts to collect on the judgment, the court may order the corporate veil to be pierced. There is no threshold level that constitutes undercapitalization, but the courts will look at the debt-to-equity ratio and cash flow requirements.
• Insufficient Oversight by Officers and Directors – If the officers and directors of a company/corporation do not actually perform their duties as required by the Operating Agreement or By-laws, a court might find insufficient oversight. Also, if a solo owner uses the company/corporation to advance his own personal interests, a court might hold that the entity acted only as his “alter ego.”
• Fraud – A court may pierce the corporate veil if it finds that the company/corporation was formed to perpetuate a fraud, such as by moving assets from one entity to another.

While there is no exhaustive list for how to protect the limited liability of your company or corporation, the following is a list of basic “best” practices to maintain:

• Adhere to Corporate Formalities – Make sure that you pay your annual dues and adhere to the rules set forth in your By-laws or Operating Agreement. In the event you do not have these documents, familiarize yourself with rules set forth in the state corporations code, which will be applied to your company by default. Because these rules are applied to your company or corporation by default, it will likely be easier to use your own By-laws or Operating Agreement. Also, doing so demonstrates to a court that you respect the corporate structure.
• Keep Assets Separate – Set up a business bank account and make sure that personal debts are paid with personal funds and corporate debts are paid with corporate funds. Do not remove corporate funds to pay personal debts without signing loan documents or documenting the expense and the immediate reimbursement.
• Sign as Your Business – The limited liability of the company/corporation applies if contracts and documents are signed on behalf of the company/corporation. Make sure that you sign in your corporate capacity with the company/corporation and not as an individual.
• Do Not Mix Credit Cards – If some business expenses must be paid with a credit card, make sure that you have a dedicated card for business expenses.
• Maintain Adequate Corporate Records – Keep all of your corporate documents in one safe, secure place.
• Maintain Owner Accountability – Make sure that the owners and officers of your company/corporation are performing the duties set forth for them in the bylaws or operating agreement.

This is your business and your livelihood, so make sure you are cognizant of the actions necessary to protect yourself (and your assets). For more information relating to protecting the limited liability afforded to companies and corporations, contact Sarah Schauerte of Legal Meets Practical, LLC at [email protected].

Did you find this article informative? If so, sign up for my weekly blog on veterans issues and updates at: https://legalmeetspractical.com. Make sure to click the link sent to your email to activate your subscription!

In a final rule effective October 5, 2012, the Department of Veterans Affairs (VA) announced that it will provide service dogs to veterans with hearing, vision, or mobility-related disabilities, but not to veterans suffering from post-traumatic stress disorder (PTSD) and other mental health disorders.

This rule comes at the conclusion of a long, detailed study by the VA which analyzed the value of service dogs to veterans suffering from certain types of disabilities. Unfortunately for veterans suffering from PTSD, the VA nixed the idea of providing them service dogs due to to the unavailability of medical evidence supporting this need. Little clinical research addresses mental health service dogs, and the VA could not determine that these dogs provided a “medical benefit” to these veterans.

According to the VA, the only evidence in support of providing service dogs to veterans suffering from mental disorders is anecdotal accounts of subjective benefits. Such anecdotes show a decreased dependence on medications; an increased sense of safety or decreased sense of hyper-vigilance; an increased sense of calm; and the use of the dog as a physical buffer to keep others at a comfortable distance. The VA concluded that these “subjective accounts” could not be used as a basis for administering VA benefits. Such a tight-fisted approach is hardly surprising given the overburdened and underfunded state of the VA system.

At least the final rule provides for those veterans suffering from physical ailments, which is more than can be said for years past. Surprisingly, until now, the VA had no official program or mechanism for providing service dogs to veterans who needed them. With the issuance of this new rule, benefits to veterans include assistance with veterinary care; travel benefits associated with obtaining and training a dog; and the provision, maintenance, and replacement of hardware required for the dog to perform the tasks necessary to assist such veterans. The new regulations governing these provisions are set forth at 38 CFR Part 17.

In order to be eligible to receive benefits for having a service dog, a veteran must receive a certificate under 38 CFR 17.148. The eligibility requirements under 38 CFR 17.148 are as follows. First, the veteran must be diagnosed as having a visual, hearing, or substantial mobility impairment; and the VA clinical team that is treating the veteran for this impairment must determine based on medical judgment that it is optimal for the veteran to manage the impairment and live independently through the assistance of a trained service dog. Second, in order for the service dog to be recognized under this program, the dog and the veteran must have successfully completed a training program offered by an organization accredited by Assistance Dogs International or the Internal Guide Dog Federation, or both.

While this is a step forward, the rule doesn’t note one important point: the VA isn’t actually providing the service dog to the veteran in need. Rather, the rule merely provides that in the event that the veteran obtains the service dog (which requires thousands of dollars and an approval process), if the veteran meets certain stringent conditions the VA will pay for various elements of maintaining and keeping the service dog.

One must wonder how many veterans will in fact meet these criteria. In fact, the VA itself in the final rule states that it estimates that only one hundred veterans will be eligible for such veterans. One hundred veterans. Considering that the VA itself estimates that as of June 2010, 3.16 million veterans are receiving disability compensation benefits, the provision of service dogs to only one hundred of these individuals is almost laughable.

But, of course, it isn’t laughable. These veterans’ needs are real, and this situation is serious.

For the full text of the final rule, which was issued on September 5, 2012, visit http://cryptome.org/2012/09/va090512.htm.

Despite the fun and excitement offered by metropolitan cities, if you’re waiting on your VA disability compensation claim you might prefer Lincoln over Los Angeles.

A recent analysis conducted by the Center for Investigative Reporting (CIR) fully details the wait times on VA disability compensation claims by geographic location. The wait time for an initial decision at the slowest Regional Office (RO) can exceed a year (Waco, Texas – 403 days), while the wait time at the fastest RO can take just a few months (Lincoln, Nebraska – 116 days). In a nutshell,the analysis shows that veterans in sparsely populated states encounter relatively quick resolution of their compensation claims while veterans in cities wait for what seems like forever.

The CIR analysis also identifies the most backlogged Regional Offices (RO). These are as follows, in descending order: Waco, Texas (1); New York, New York (2); Indianapolis, Indiana (3); Phoenix, Arizona (4); Los Angeles, California (5); Chicago, Illinois (6); Reno, Nevada (7); Roanoke, Virginia (8); Oakland, California (9); and Baltimore, Maryland (10). Interestingly, the notoriously slow St. Petersburg, Florida RO is absent from the list.

This geographic inequity of VA wait times is fully detailed in an interactive map on the CIR website, which displays the 58 VA Regional Offices (ROs) and the number of backlogged claims by week. The map updates every Monday based on any additional information obtained in the prior week.

If you are a veteran interested in the wait times applicable to a particular Regional Office, you can click on a city listed on the interactive map. It will show you the number of pending claims, average wait time for an initial decision, average wait time on appeal, and the number of veterans waiting 125 days or more.

For example, the Roanoke RO, which is the eighth-slowest RO, currently has 27,790 veterans awaiting decisions on their disability compensation claims. On average, veterans with claims pending at this RO wait 332 days for a decision on an initial claim. In comparison, the RO located in Fort Harrison, Montana has only 1,870 veterans awaiting decisions. There, the average wait time for decisions on an initial claim is 125 days.

There’s no doubt that this information is interesting to veterans. For those veterans who are waiting on their claims, it’s nice to at least know what kind of wait time to expect.

But at the same time, there’s nothing these veterans can do with this information to shorten their wait times. A claim is assigned to an RO based on the physical location of a veteran. It is not as though a veteran located in California (where the average wait time at all three California ROs exceeds nine months) can elect to have his claim processed elsewhere. Instead, he must wait for the assigned RO to reach his claim in the queue, and in the meantime face mounting bills that could be alleviated by a disability compensation award. Not even a snazzy interactive map can help with that.

CIR is the nation’s oldest non-profit investigative reporting organization. Its findings were gleaned from VA online resources and Freedom of Information Act (FOIA) requests made by those who contributed to CIR’s analysis. To access the CIR’s analysis and the interactive map, visit http://cironline.org/reports/map-where-veterans-backlog-worst-3792.