Happy Anniversary Lipson Neilson

Today marks the 31st anniversary of the Lipson Neilson law firm. The firm has grown from three founding members to over thirty attorneys located in three states. The firm has also expanded its expertise from its core business, tax and litigation practice areas during its early days, to currently offering a full range of practice areas including professional liability, probate litigation and international law.

Michigan Supreme Court Appoints C. Thomas Ludden to Committee on Model Civil Jury Instructions

C. Thomas LuddenMichigan Supreme Court Appoints C. Thomas Ludden to Committee on Model Civil Jury Instructions

Bloomfield Hills, MI – Feb. 5, 2016 – Lipson, Neilson, Cole, Seltzer, Garin, P.C. is proud to announce that C. Thomas Ludden, a Partner at the firm, has been appointed by the Michigan Supreme Court to serve on the state’s Committee on Model Jury Instructions. The appointment is for a three year term ending December 31, 2018.

This Committee is composed of attorneys and judges whose duty is to ensure that the Model Civil Jury Instructions are concise, understandable, conversational, unslanted, and not argumentative. The Committee has authority to amend or repeal existing instructions and, when appropriate, adopt new instructions, although the instructions do not have the force and effect of a court rule.

About Attorney C. Thomas Ludden
C. Thomas Ludden specializes in commercial litigation, professional liability, and appellate practice. He also brings to his practice extensive insurance coverage and appellate experience. Mr. Ludden has defended over 100 law firms and lawyers during his career, while also handling a broad range of commercial disputes, including representing both landlords and tenants in commercial lease and other contractual disputes, software developers in intellectual property matters and both private and public corporations in environmental litigation.

About the Firm
Founded in 1985, Lipson, Neilson, Cole, Seltzer & Garin, P.C. has offices in Bloomfield Hills, Grand Rapids, Las Vegas and Phoenix. The firm is widely known for its excellence in the professional liability lines, offering invaluable insight and experience to its clients across all industries. The firm represents clients in Michigan, Nevada, Arizona, across the USA, and around the world.

You can learn more about the firm at www.lipsonneilson.com.
Contact: C. Thomas Ludden Phone: 248-593-5000 Email: TLudden@lipsonneilson.com

Attorney Joe Garin Awarded Prestigious Designation of Certified Litigation Management Professional

November 20, 2015 – Joe Garin, the Managing Partner of the Lipson, Neilson, Cole, Seltzer, Garin, P.C. Las Vegas office, hasJoseph Garin high res successfully completed the extensive requirements of the Litigation Management Institute and has been awarded the prestigious designation of Certified Litigation Management Professional by the Claims & Litigation Management Alliance (CLM). Hosted at the Columbia Law School in New York City, this Institute is specifically designed to bridge the gap between legal theory and litigation strategy, and the business aspects of litigation management. Only 100 industry professionals are admitted every year to this Institute.

Garin is recognized throughout the United States as an expert in all areas of professional liability law including the defense of professional liability claims, insurance coverage disputes, director and officer claims, ethics, employment disputes and risk management. He frequently provides expert witness support in matters involving attorney liability and ethics, and he is regularly called upon by insurers and businesses of all sizes for counsel on how to manage risks and minimize litigation expenses. Throughout his career, Garin has defended more than 400 lawyers and law firms in Nevada, Michigan, Illinois, and Colorado. You can contact Joe by calling his office at 702-382-1500, or send an email to JGarin@lipsonneilson.com

About Lipson Neilson
Founded in 1985, Lipson, Neilson, Cole, Seltzer, Garin, P.C. has offices in Las Vegas, Phoenix, Bloomfield Hills and Grand Rapids. The firm is widely known for its excellence in professional liability law, offering invaluable insight and experience to its clients across all industries. The firm represents clients in Nevada, across the USA, and around the world. You can learn more by visiting www.lipsonneilson.com.

About CLM

The CLM promotes the highest standards of claims and litigation management and brings together thought leaders in both industries. CLM’s Members and Fellows include risk and litigation managers, insurance and claims professionals, corporate counsel, outside counsel and third party vendors. To learn more, please contact Susan Wisbey-Smith, CLM Communications Manager by calling 847-317-9103, or send an email to susan.wisbey-smith@theclm.org.


Attorney Joe Garin Featured Speaker at State Bar of Nevada’s “Ethics Year in Review” Seminar

Joseph Garin high resNovember 20, 2015 – Joe Garin, Chair of the State Bar of Nevada’s Standing Committee on Ethics and Professional Responsibility, and Managing Partner of the Las Vegas office of Lipson, Neilson, Cole, Seltzer, Garin, P.C., was a featured speaker during the State Bar of Nevada’s annual “Ethics Year in Review” seminar held on November 19, 2015. This seminar provided attendees with three Continuing Legal Education (CLE) credits. Garin discussed the ethical concerns pertaining to some very relevant topics in today’s legal industry including: lawyer blogs and advertising, medical marijuana, representation for individual v. organization, data privacy laws, working with third-party vendors, changing firms and law firm dissolution.

Garin maintains a national practice that focuses on the defense of professional liability claims, insurance coverage disputes, directors and officers claims, and risk management. Throughout his career, he has defended more than 400 lawyers and law firms across Michigan, Illinois, Nevada and Colorado. He regularly consults with insurers and businesses of all sizes to manage their risks and reduce litigation expenses.

About the Lipson Neilson Firm
Founded in 1985, Lipson, Neilson, Cole, Seltzer, Garin, P.C. has offices in Las Vegas, Phoenix, Bloomfield Hills and Grand Rapids. The firm is widely known for its excellence in professional liability law, offering invaluable insight and experience to its clients across all industries. The firm represents clients in Nevada, across the USA, and around the world. You can learn more by visiting www.lipsonneilson.com.

Contact: Joe Garin
Phone: 702-382-1500
Email: JGarin@lipsonneilson.com

Staying Out of CFPB Jail (Part 1)

Most of us have heard of the Consumer Financial Protection Bureau(CFPB) and that it is not only coming to town…it is already here. In turn, now is the time for all professionals in the real estate field to learn how to stay out of CFPB jail! This is the first of a three part series on the CFPB and its enforcement powers.

The CFPB is an independent agency of the United States government responsible for consumer protection in the financial sector. In 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act created the CFPB as a response to the financial crisis of 2007–08 and the subsequent Great Recession.

Included within its jurisdiction is enforcement of the Real Estate Settlement Procedures Act (RESPA). Specifically, Section of 8 of RESPA and its prohibition against “kickbacks” among settlement service providers.

Real Estate Agents are settlement service providers, as are lenders, title and escrow companies, appraisers, inspectors and home warranty companies. Significantly, RESPA has been in place since 1974 and, hence, RESPA violations have been actionable for over four decades. Yet, because the U.S. Department of Housing and Urban Development was charged with RESPA compliance and had limited resources, enforcement has been sparse. That will and has changed with the CFPB.

The CFPB, with offices in Washington D.C. and Phoenix, Arizona, is well staffed and incredibly well funded. It also generates revenue by and through assessing fines and penalties for non-compliance with the laws under its jurisdiction. Those fines can range from $5,000 per violation up to $1,000,000. This is serious business.

So, what should real estate licensees be mindful of?

  • Co-Marketing among settlement service providers (Flyers and other promotional materials). In the past, it was not uncommon for industry partners, such as lenders or title companies, to provide a licensee with marketing materials (say a flyer, or customized pens or calendars or the like) that included an agent’s logo, information and/or picture on it. They did so without charging the licensee the cost of producing the marketing pieces and to bridge a relationship. That is not permitted. Indeed, if another service provider offers to do a specialized marketing piece for a licensee, the licensee must pay the fair market value for the piece (pro rata). For example, if 75% of a flyer is dedicated to the licensee’s business and 25% to a title company, the agent/licensee must pay for 75% of the cost of producing it.
  • Co-Marketing on Lead Sites and other Real Estate Sites (Zillow or Trulia). It is likewise not uncommon for settlement service providers to market together on these types of lead-generating websites. And, often times one of the providers pays the entire cost for both. That should not occur. Again, the providers should pay their proportionate cost of the marketing.
  • Providing Food and Refreshments at Events. A settlement service provider (e.g. a title company) sometimes offers to furnish food and refreshments for an event hosted by another provider (e.g. a real estate brokerage). This often occurs at team meetings, office meetings, and home tours. By providing something of value, the CFPB could consider this a kickback. One way to mitigate this, and possibly avoid a RESPA infraction, is to make certain that the settlement service provider who is furnishing the food and drink is present at the event and afforded an opportunity to actually market their services. So, in essence, in exchange for paying for the food and beverages, the title company is able to meet with agents, a team, consumers or others and advertise its services.
  • Template Pieces. There seems to be a split in the industry as to whether “template-type marketing pieces” are RESPA compliant. For instance, title companies often create listing books or buyer brochures that they provide to real estate licensees to give to buyers and sellers the licensees are working with. The books/packets are consumer driven and are largely informational as to the real estate market, listing information, etc. and basically a promotional piece for the title company. However, the title companies will often personalize the template to include a licensee’s name, brokerage, phone number and email on the cover. Some in the industry believe that because these books/packets/brochures are not created specifically for an individual licensee and/or to actually market the licensee, providing them for free is not a kickback. Others take the position it is still something of value and the cost of production should be pro-rated.
  • Event Tickets, Meals and Entertainment. Marketing 101: get to know your referral partners. An effective means of marketing has always been taking a potential referral source to lunch, to a game or event. Can those tickets be considered something of value to trigger a RESPA violation? Well, it is almost certainly a RESPA violation if a real estate licensee accepts tickets from another provider (lender for instance) and that provider does not join the licensee at the event. If they go together, then, again, it could be argued that there is value being exchanged – e.g. an opportunity to market and grow the relationship.

Be mindful of two things in reviewing the foregoing. First, this a general overview of RESPA based solely on current trends. The CFPB is just now ramping up and we will receive more guidance going forward as to what it considers a RESPA violation. Second, a licensee’s own state law may address, limit and/or govern some of these issues as well.

In our part II of this series, we will explore Marketing Service Agreements and CFPB compliance.

About the Author
rsz_1rsz_1dax_watsonDax Watson is the Managing Partner of the Phoenix office of Lipson, Neilson, Cole, Seltzer, Garin, P.C. He has extensive litigation and professional liability defense experience, especially in the field of real estate. He has appeared and represented clients in every county in Arizona and has an extensive trial practice, and he routinely represents clients in regulatory matters before the Arizona Department of Real Estate and other State agencies. Dax has been appointed by the Maricopa County Superior Court to act as a Judge Pro Tempore. In this capacity, he conducts Court-appointed settlement conferences as a Settlement Judge and also serves as a “fill-in” Judge on civil matters and short trials and likewise conducts private mediations. In addition to his legal practice, Dax is approved to teach legal issues, agency and disclosure, and property management by the Arizona Department of Real Estate. He regularly teaches risk-reduction classes to, and seminars for, real estate Brokers throughout Arizona.

You can contact Dax by calling 602-626-8888, or send an email to DWatson@lipsonneilson.com.

Lipson Neilson Adopts a Family for the Holidays

Adopt-A-Family-Banner-2012LNCSG is making a difference once again in a family’s life. Each year the firm adopts a family from the Children’s Hospital of Michigan Foundation, the program connects families in need with generous individuals and organizations to provide food and gifts during the holiday season. Adopt-A-Family helps approximately 500 families each year and continues to make a difference.


How Do I Stay Out of the Lawyer’s Office

Article written by Dax Watson provides tips for Real Estate Agents. This article is on page 3 of the December 2015 issue of WestWords, published by WestUSA Realty.

Article in West Words Dec 2015

 Lipson Neilson Law Firm Moves Phoenix Office to New Location

November 16, 2015 – The attorneys at Lipson, Neilson, Cole, Seltzer, Garin, P.C. are excited to announce the move to their new location at 5343 N. 16th Street, Suite 140, Phoenix, Arizona 85016. This new location allows the firm to accommodate the growth in number of attorneys and clients since the firm originally opened an office in Phoenix this past March.The Lipson Neilson law firm is well-known for its successful track record in professional liability defense work, and real estate law. With offices in Phoenix, Las Vegas, Grand Rapids, and the firm’s headquarters in Bloomfield Hills, Michigan, the firm is capable to serve clients anywhere in the country. To learn more please visit lipsonneilson.com, or contact Dax Watson, Managing Partner of the Lipson Neilson Phoenix office by calling 602-626-8888 or email to DWatson@lipsonneilson.com.

2015 Michigan Super Lawyers Includes Five Lipson Neilson Attorneys

Lipson Neilson Super LawyersFive attorneys from the firm’s Bloomfield Hills office have been selected to the 2015 Michigan Super Lawyers and Rising Stars lists. Jeffrey Neilson, Steven Cole, Phillip Seltzer and Mary T. Schmitt Smith are “Michigan Super Lawyers”, and Starr Kincaid is a “Michigan Rising Star”. Each year, no more than five percent of lawyers in the state are selected as Super Lawyers, and no more 2.5 percent are selected to the Rising Stars list.

Jeffrey T. Neilson has been selected as a Michigan Super Lawyer for the ninth consecutive year. One of the firm’s founders and a shareholder, Jeffrey is known nationally for his expertise in probate litigation, business counseling, estate planning and domestic and family law liability. In 2014, Jeffrey was reappointed by the Michigan Supreme Court to serve on Michigan’s Attorney Grievance Committee (AGC); this appointment is through October 1, 2017.

Steven R. Cole has been selected as a Michigan Super Lawyer for the ninth consecutive year. A founding shareholder, Steven has a diverse practice focusing on real estate, business and corporate matters, and estate planning. Steven has previously served as an adjunct instructor of taxation at area business colleges and has taught continuing education courses approved by the Michigan Insurance Bureau for licensed insurance professionals. He has conducted numerous seminars for the Michigan Association of Certified Public Accountants, and has served on the boards of directors of public charities.

Phillip E. Seltzer has been selected as a Michigan Super Lawyer for the fifth consecutive year. A shareholder of the firm, Phillip is a specialist in the areas of legal malpractice, architect and design professional malpractice, accounting malpractice, real estate broker errors and omissions, directors’ and officers’ liability claims and insurance coverage disputes. During 2104, a complex legal malpractice case, arising out of a medical device product liability matter that was successfully defended and dismissed through the efforts of Phillip Seltzer and Starr Kincaid has been described by Michigan Lawyers Weekly as one of the “Most Important Opinions of 2014″.

Mary T. Schmitt Smith has been selected as a Michigan Super Lawyer for the ninth consecutive year. She advises clients about estate planning, tax and probate options, with a distinct focus on drafting and administration of Special Needs Trusts. Mary is Michigan’s first Certified Elder Law Attorney and is AV-Rated by Martindale Hubbell for the past 16 years. She has served on the Board of Directors of the National Academy of Elder Law Attorneys, and is a charter member of the Special Needs Alliance, a national network of lawyers dedicated to Disability and Public Benefits Law.

Starr M. Kincaid has been selected as a Michigan Super Lawyers Rising Star for the third consecutive year. Starr devotes a majority of her practice to the defense of professional liability and employment practices claims. Starr is a recognized for her work in the areas of professional liability law and employment litigation and is often invited to speak at national conferences conducted by leading industry associations. During 2014, a complex legal malpractice case, arising out of a medical device product liability matter that was successfully defended and dismissed through the efforts of Phillip Seltzer and Starr Kincaid has been described by Michigan Lawyers Weekly as one of the “Most Important Opinions of 2014″.

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multi-phase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.

About Lipson, Neilson, Cole, Seltzer, Garin, P.C.

2015 Marks the 30th anniversary of the Lipson Neilson law firm that has grown from three founding members to thirty attorneys located in three states. The firm has also expanded its expertise from its core business, tax and litigation practice areas during its early days, to currently offering a full range of practice areas including complex business tort litigation, professional liability defense, employment law and litigation, international law, real estate, probate litigation, family law and estate planning. Lipson Neilson attorneys represent and provide counsel to clients around the country, and around the world. To learn more about the firm, please visit www.lipsonneilson.com or call the Bloomfield Hills office at (248) 593-5000.

Can Insurance Defense Counsel ‘Serve Two Masters’?

If you are a DRI member and are reading this, you’re probably a defense lawyer. And, as a defense lawyer, you probably receive the majority of your work from insurance carriers. The relationship between the insurer, insured, and defense attorney is a complicated one and is known by many names: the triad, the triadic or tripartite relationship, the eternal triangle, the Bermuda triangle—and even the eternal conundrum—to name just a few. This relationship has been called “deeply and unavoidably vexing” and understood to create problems that would “tax Socrates.” Silver, C., “Does the Insurance Defense Counsel Represent the Company or the Insured?” 72 Tex L. Rev. 1583, 1587 (1999); Harland v. Foster, 528 So. 2d 255, 273 (Miss. 1988).

Of course, this “deeply and unavoidably vexing” situation is rooted in the notion that “insurance defense counsel” represent and have obligations to two different clients. And, because of this, there is an “inevitable tension and a potential that the attorney’s representation of one may be rendered less effective because of his representation of the other.” Spindle v. Chubb/Pacific Indemnity Group, 152 Cal. Rptr. 776, 780-81 (Cal. Ct. App. 1979). This “inevitable tension” arises because most defense attorneys have established, ongoing relationships with the insurer that hires them, not the insured they are hired to represent.

Indeed, a large chunk of many practices (and marketing budgets) are devoted to creating and maintaining relationships with insurance carriers, and their adjusters and claims attorneys, in an effort to secure future business. On the other hand, very few defense attorneys enjoy similar relationships with the insureds – and therein lies the problem. It is the “strong and perpetual economic linkage between insurers and their regular counsel that most concerns courts and insureds.” Richmond, Douglas R., Lost in the Eternal Triangle of Insurance Defense Ethics, 9 Georgetown Journal of Legal Ethics 475, 482 (1996).

With that said, where should your loyalties lie and who is your actual client? Is it the insured who is the named defendant and is “represented” in court? Or is it the insurer who, more often than not, chose the attorney, pays the law firm, supervises the litigation, and has, by virtue of the insurance policy, the right to settle the case, even over the objections of the insured? Stempel, Jeffrey W., The Relationship Between Defense Counsel, Policyholders, and Insurers: Nevada Rides Yellow Cab Toward “Two-Client” Model of Tripartite Relationship. Are Cumis Counsel and Malpractice Claims by Insurers Next? (2007). Scholarly Works. Paper 183. The ABA Model Rules (or state equivalent) and the Restatement (Third) of the Law Governing Lawyers (“Restatement”) govern the ethical duties of attorneys in these relationships. Counsel should also consult individual state professional responsibility rules (most states have adopted the ABA Model Rules) and state ethics opinions.

Like most questions in the law, the answer varies by forum. The majority rule is that in the absence of a conflict, both the insurer and insured are considered clients of the insurance defense firm. See Nevada Yellow Cab Corporation v. The Eighth Judicial District Court 152 P.3d 737 (Nev. 2007). Obviously, this article is not a comprehensive review of all states’ positions on this matter, and not all states follow the majority rule, so you should refer to the appropriate state-specific rules and case law to be sure of your obligations.

The prominent two-client model provides that your “primary” client is the insured and the insurer is a “secondary client.” This means that if an insurer and insured’s interests conflict, you “may not betray the interests of the policyholder in favor of the insurer, no matter how steady a stream of business the insurer may provide.” Id. Practically, for example, in a status update to the carrier, you may not purposefully divulge an insured’s ethically privileged information that would cause the insurer to deny coverage. The conflict in this example is your duty of confidentiality owed to your client versus the carrier’s interest in limiting its expenditures related to your client’s policy. We all deal with small conflicts like this on a regular basis.

Larger conflicts of interests, however, are less likely but create particularly thorny situations for defense counsel. For instance, a carrier may choose to furnish a legal defense while at the same time reserving its right to deny coverage related to any judgments against its insured. The insurer and policy holder’s interests become adverse because the insured will aim to preserve indemnity whereas the insurer will work to establish a basis for non-coverage, and you will find yourself stuck in the middle. Various states, including California, Illinois, Texas, and New York, agree that a carrier’s reservation of rights can create a conflict of interest for the carrier retained defense counsel. Effectively, those states conclude that an insured’s “legal right to a conflict-free defense supersedes the carrier’s contractual right to select its panel counsel and control the litigation decisions.” Bolender, Jeffrey, Will Nevada Adopt the Cumis Requirement: History, Analysis, and Conflict Resolution (2013). Many forums hold that while the issuance of a reservation of rights letter can create a conflict of interest, it is not absolute and will be considered on a case by case basis.

The question then becomes whether the client can (or will) consent to representation by retained defense counsel despite the potential conflict, or whether the attorney must withdraw from representation of one or both clients. Sometimes the conflicting interests in these situations makes ethical representation of both clients difficult, if not impossible. Some of the unavoidable ethical considerations involve including retained counsel’s ability to manipulate trial strategy to benefit one client to the detriment of the other and retained counsel’s access to potentially damaging information through confidential communication with each client.

So, how are you supposed to know if you are presented with a disqualifying conflict of interest? Relevant case law reveals that only specific types of issues—often times called “steerable” issues—create a disqualifying conflict of interest for carrier retained defense counsel. Generally, steerable issues are malleable, fact-intensive questions. A common steerable issue example is when a carrier issues a reservation of rights based on a mental basis, such as an exclusion for intentionally caused losses. This is because “the same universe of facts can be used to demonstrate either intentional conduct or accidental conduct. Thus, the issue is relatively steerable, because a good lawyer could employ the same “bucket” of facts to show the policyholder’s liability-producing conduct was intentional (not covered) or accidental (covered).” Id.

Regardless, if a carrier issues a reservation of rights letter, at the very least, it should send up a red flag prompting you to explore the conflict of interest issue, because at the end of the day, no man can serve two masters.

Jessica A. Green is an attorney at Lipson, Neilson, Cole, Seltzer & Garin, P.C. working in the firm’s Las Vegas, Nevada office. Her practice focuses primarily on professional liability defense, employment law, bad faith insurance defense, and commercial litigation. Ms. Green has also practiced in the areas of construction law and real estate. She can be reached at JGreen@lipsonneilson.com.

Joseph Hainline is an attorney at Carr Maloney P.C. in Washington, D.C. He concentrates his practice in general liability, professional liability, and premises liability, as well as in complex civil litigation.

This article was published in the June 29, 2015 issue of The Whisper, the DRI’s Newsletter of the Young Lawyers Committee.