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We are a growing Business and Entertainment boutique law firm in the Financial District.  We love what we do.  Every day, we get to help creative and innovative people accomplish cool things.  We’re always professional, but we’re also a friendly group.  We like each other.  Building a motivated team of collaborative attorneys is our top priority.

Who We’re Looking For:

  1. You are a stellar attorney with at least 4-6 years in venture capital and corporate law.  You are practical and resourceful.  You think big picture, but you are also attentive to detail.  Basically, your legal skills are on point.
  2. You love being a lawyer.
  3. You communicate effectively, in plain-English.  You avoid legalese, unless absolutely necessary.
  4. You’re licensed in at least NY or CA.
  5. It might be raining and storming outside, but the forecast of your disposition is clear skies and sunny.  You have a great sense of humor.  You’re positive and resilient.  You are confident and almost always prepared.  You enjoy learning and improving.
  6. You take pride in being a professional.  You treat everyone (clients, adversaries, colleagues and cleaning staff) with respect.  You are polished and poised with great energy.
  7. You realized long ago that the legal profession is a services business.  You have amazing customer service skills.  Clients love you.  You’re always responsive and often proactive.  You keep your clients and the team well-informed.

The Mid-Level Associate Position:

You would:

  • Manage a team of 5 junior Associate Attorneys and 2 Law Clerks.
  • Lead by example: with your work ethic, constructive feedback and positive attitude.
  • Report to one of our Co-Managing Attorneys.
  • Draft, review and revise legal documents, and deliver practical advice.
  • Have significant client contact.
  • Participate in our brief daily team meetings.
  • Be involved in client development and the growth of the firm.

To be considered for this position, please email RomanoLawAssociate@gmail.com, with the subject line “Mid-Level Associate – 2018.”  Please include your (a) resume, (b) cover letter, and (c) pay requirements.

Additionally, in your cover letter, please briefly describe your relevant experience in venture capital and corporate law, and the date of the first Grammy Awards.

Please only apply if you have the requisite experience and you have carefully read all the above.

The post Join Our Team! appeared first on Romano Law PLLC.

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By: Anjana Puri

“So, what were you making in your last position?”  For many, that’s one of the most dreaded questions asked during a job interview or on an application.  While your future employer may want to know all those details, it may seem unfair that your next salary could be determined by what you were making in your last position.  If you’re doing a different job for a brand new employer, why is your salary history even relevant?

WHAT’S IT ALL ABOUT?

Well, the New York City Commission on Human Rights (CCHR) asked the same question and came up with this answer: past salary should not be used to determine future earnings.  In October 2017, the CCHR enacted the Local Law 67, making it illegal for employers in New York City to ask about an applicant’s salary history.  The purpose of this law is simple: to help prevent people who may have been underpaid at their previous jobs from being undercompensated in the future.  Now, employers have to rely on a candidate’s experience and qualifications when determining their compensation, not what someone else might have been paying them in the past.

WHO DOES THE LAW APPLY TO?

All employers throughout New York City must comply with this new law, including:

  • Private employers;
  • Public employers; and
  • Employers of any size.

WHAT EXACTLY IS PROHIBITED?

The law became effective on October 31, 2017 and now prevents employers from asking applicants about their salary history at any point during the hiring process, including:

  • In the initial job application;
  • In advertisements, postings or descriptions about the job; and
  • Throughout the entire interview process.

Also, the law applies whether the position is full-time, part-time or an internship, and even protects independent contractors who don’t have their own employees.

WHAT IS NOT PROHIBITED

While this law applies to many situations regarding conversations about pay, it doesn’t prohibit everything.  Employers can still ask about your salary expectations for your next job or talk about what the compensation for the open position will be.  But, be careful with volunteering information!  If you provide your salary or benefits history on your own, without any questioning or prompting from the employer, they can use this to consider your new salary.  Employers may also inquire about your salary history if there are other local, state or federal laws allowing or requiring them to do so.

LOOKING FORWARD

Employers who violate these new laws can find themselves in hot water.  Violators may be required to pay a fine, undergo training or pay damages to the potential employee.  In order to avoid this, the best practice is to focus the hiring process on the applicant’s skills, credentials and salary requirements that they have sent on their own.  Also, take time to educate any staff members that will be involved in the hiring process to make sure they are aware of the new requirements.

New York City isn’t the only place enacting laws like this.  So far, similar legislation has been enacted in California, Delaware and Massachusetts.  So, no matter where you end up in your career, it’s important to know the ins and outs of this law so you don’t find yourself in a sticky situation later on!

Anjana Puri

Associate Attorney

(212) 865-9848

See her full profile

The post Show Me the Money, but Just Don’t Ask Me About It… appeared first on Romano Law PLLC.

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By: Anjana Puri

In Part 1 of this series, we dove into the exciting world of film finance by way of investments and securities.  In this Part 2, we’re going to explore another avenue of raising money for your movie: donations and grants.

People say there’s “no such thing as a free lunch”, but donations and grants may just be the next best thing.  This method of raising capital for your film solves your money problem without the additional strings that may come along with investments, as laid out in Part 1.

Donations and grants can come in various forms:

Individual Donors

As the old adage goes: “charity starts at home”.  Scour your network of family and friends for people who support your artistic ventures and are willing to put their money up to help you.  Perhaps besides a call on their birthday, you will not owe these donors anything, so you sidestep the securities issues we mentioned in Part 1.  But, a word to the wise: accepting money from loved ones can sometimes turn into a sticky situation.  Make sure to use your best judgment in selecting who to ask and for how much.  Be clear about how the money will be used and the extent of the donor’s participation.  That way, everyone is clear on their role going forward.

Foundational Grants

Many believe that foundational grants are limited to documentaries and educational films.  However, a quick Google search will show you many organizations looking to support filmmakers from every corner of the industry.  These grants usually require a lengthy application process, are often competitive and have strict deadlines.  Make sure to keep an eye out on the rules surrounding the program when deciding which one is right for you.  Things to look out for may include:

  • Whether the foundation is looking to support a specific population or subject matter;
  • If there are any limitations on how the grant money may be spent; and
  • That all-important deadline.

Donations[1] and grants are great ways to fund your film without giving too much control away.  However, they may not be available to every filmmaker or for every film.  In such cases, other options such as crowdfunding may be appropriate.  And wouldn’t you know it, that’s that topic of our next installment in this series!  Stay tuned for Part 3!

[1] It’s best practice to consult with an accountant or tax professional before accepting donations.

Anjana Puri

Associate Attorney

(212) 865-9848

See her full profile

The post Bankrolling a Blockbuster: Part 2 – Donations and Grants appeared first on Romano Law PLLC.

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Starting or growing your own company can be exciting, but it’s critical to make sure to have some preliminary measures in place to protect yourself and your business.
When welcoming new staff on board, whether it’s the first person you’re hiring or if you’re bringing them onto an already established team, it’s important to have specific documents prepared.  Here’s how to make sure each employee you bring on knows what is expected of them and how to plan ahead if you and your employee decide to part ways.

Employment Agreements

  • In most cases, it’s essential to have an initial agreement that outlines all the basic terms of someone’s employment. A thorough employment agreement will discuss the new employee’s role, expectations, compensation, and other details.  Some agreements may specify a term of employment (i.e.: three years) and other times, agreements may state that the employee is considered an “employee at will.”  The specifics of the agreement will vary depending on your own business needs, but it’s important to have these terms solidified early on to ensure mutual understanding between you and your new employee.

Independent Contractor Agreements

  • It’s essential to know the difference between an employee and an independent contractor. A common, and costly, mistake many employers make is confusing the two.  There’s no need for you to fall into that trap!
  • An independent contractor is generally someone who is in business for themselves and operates free from supervision, direction and control in the performance of their duties to your company. Having a written agreement that lays out the terms of an independent contractor’s services to your company is critical.  Misclassifying an employee as an independent contractor is a serious error with expensive repercussions.  Knowing the key differences and making sure to have contracts for both will give you greater protection in the end.

Employee Handbooks

  • Employee handbooks are great tools for employees to have. It states your company’s policies, permitted and prohibited behavior and a description of the company’s mission.  Besides the rules of your company, a handbook also gives insight into your company’s goals, essential core values and what to expect going forward.
  • Employers always hope for the best, but sometimes things don’t work out that way. If any concerns or disputes arise in the workplace, it’s convenient to have a handbook that clearly lays out the proper steps to take towards resolution and may provide clarity about unclear situations.
  • Lastly, make sure each employee signs the handbook! It’s good practice to make sure they understand and acknowledge the policies in place and should become familiar with company expectations.

Non-Compete Agreements

  • No matter what business your company is in, it’s important to have a non-compete agreement in place. If it does not work out and it’s time for your employee to leave the company, there shouldn’t be an issue with fighting over clients, contact information or future business opportunities.  Having a thorough but reasonable non-compete will make clear what an employee can and can’t do with your client base after they leave the company.

Preparing these documents may be time-consuming, but having them in place can protect you and your business in the long run.

Elizabeth Vulaj

Associate Attorney

(212) 865-9848

See her full profile

The post Step Up for Your Startup! Critical Employment Contracts to Keep In Mind As You Grow Your Business appeared first on Romano Law PLLC.

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In December 2017, in a huge win for songwriters and publishers (and perhaps a loss to licensees like bar and restaurant owners) across the country, the Second Circuit Court of Appeals held that “fractional licensing” continues to be the appropriate method of licensing the performance rights of songs controlled by more than one performing rights organization (PRO).  This holding upholds the practice of licensees being required to obtain the fractional rights from all performance rights organizations controlling a song.

To better understand this holding’s importance, a bit of history is essential.

By the early 1940s, the American Society of Composers, Authors and Publishers (ASCAP), one of the US’s major PROs, became so powerful in enforcing public performance rights that the U.S. Department of Justice (DOJ) had begun an antitrust investigation of ASCAP.  In 1941, ASCAP voluntarily entered into a “consent decree,” which permitted ASCAP to continue to exist, but limited many of their rights.  For example, ASCAP could only accept non-exclusive rights, meaning song publishers could still license public performances themselves even when affiliated with ASCAP.  Additionally, ASCAP could not refuse to issue a license to someone due to a disagreement over price; instead, the use had to be permitted while the rate was determined in a “rate court.”

Broadcast Music, Inc. (BMI), the other major PRO, also had to sign a similar consent decree with the DOJ.

Approximately 3 years ago, an issue arose regarding songs that had multiple writers or publishers who were affiliated with different PROs.  In this scenario, no single PRO controls 100% of the song.

Traditionally, a licensee had to get a license from all of the PROs affiliated with the song (or the publishers directly).  This is known as “fractional licensing.”

However, around 2015, the DOJ began to consider whether they should re-interpret the ASCAP and BMI consent decrees to mean that each PRO should be required to license 100% of a song, even if they only controlled a fraction.  This practice would be known as “100% licensing.”

Music licensees, in favor of the change, argued that licensing should be simpler, and that copyright law allows for a joint author, even a minority one, to license an entire work, so long as he or she accounts to the others regarding payment.

However, others felt that this would cause major problems for the songwriter and publishing industries, which have already been struggling in the digital era.  Despite copyright law, none of the PROs are authorized by songwriters or publishers to license more than their share.  Additionally, if 100% licensing was permitted, licensees could “shop” for the lowest bidder amongst publishers and PROs.  And SESAC and GMR, not subject to consent decrees, could potentially put ASCAP and BMI out of business with such a reinterpretation.

Ultimately, the court held in favor of industry practice, and upheld fractional licensing as permissible under the consent decrees.

For now, “fractional licensing” is here to stay.

Samuel P. Madden

Associate Attorney

(212) 865-9848

See his full profile

The post ASCAP and BMI Consent Decrees: “Fractional Licensing” is Permissible appeared first on Romano Law PLLC.

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Many employees can look forward to spending more time with their loved ones in 2018.  The New York State Paid Family Leave program went into effect on January 1, 2018.  The program will now provide New Yorkers paid leave to care for a newborn child, a close relative with a serious health condition, or assist loved ones when a family member is deployed abroad for military services. 

While this is sure to be great news for many employees, as an employer, keeping up with new laws like this can be a challenge.  Here’s what you need to know and the changes to prepare for in the new year!

The program provides job-protected, paid time off so an employee can:

  • Bond with a newborn, whether it is a biological, adopted or fostered child
  • Care for a close relative with a serious health condition or
  • Assist loved ones when a family member is deployed abroad on active military service

The program became effective on January 1, 2018, and now, employees are entitled to up to 8 weeks off, at half of their weekly pay, with a cap of $652.96 per week.  By 2021, employees are entitled to get 12 weeks at 67% of their pay.[i]

So, who’s entitled to paid family leave?

  • Employees in New York State who have worked for their employer for at least six months
  • All employees who work for a private employer are entitled to the Paid Family Leave
  • Public employers may choose to offer the paid time off
  • Male and female employees are both entitled to the time off
  • Full-time employees with a work schedule of 20 or more hours per week are eligible after 26 consecutive weeks of employment
  • Part-time employees with a work schedule of less than 20 hours per week are eligible after 175 days of employment
  • Employees’ citizenship or immigration status do not affect eligibility

As an employer, keep these tips in mind:

  • Employers should pay for Paid Family Leave benefits through a payroll deduction
  • Employers’ insurance carrier will be able to receive and process Paid Family Leave requests – so, it is important for you as the employer to coordinate with your carrier sooner rather than later
  • Paid Family Leave guarantees employees the ability to return to their job, and continue with their health insurance when they get back

Keeping up with all these changes can be difficult.  However, being prepared will ultimately make you a better business owner, and keep you up to speed with what your staff and team are entitled to in the long run.

____________________________

[i] In 2019, employees will be entitled to 10 weeks of paid leave at 55% of their average weekly wage.  Come 2020, employees will still be entitled to 10 weeks of paid leave, but at 60% of their average weekly wage.

Elizabeth Vulaj

Associate Attorney

(212) 865-9848

See her full profile

The post Financing Families: New York State Paid Family Leave appeared first on Romano Law PLLC.

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When you’re signing agreements in entertainment, it’s important to read the fine print.  There’s a pesky tendency for contracts to include a representation that all of the rights you’re granting are, in fact, yours to grant.  It’s easy to gloss over, but it should really make you stop, think and take a step back.  You’re probably so excited by the opportunity, you may have forgotten to cross the t’s and dot the i’s.  Ask yourself – DO you have these rights?  A third party interested in your work won’t be thrilled if you don’t have what’s called “chain of title” all squared away.

As a quick primer, chain of title was traditionally understood as a real property concept but has since branched out into intellectual property, particularly in the digital age.  It refers to the concept that every person who contributed to the creation of a film, TV show, work of fiction, or any other type of media has assigned or licensed their rights to the appropriate party, and that the owner of the end result is, in fact, the rightful owner.  For example, let’s say you developed a video game, and you had other people create art and sound for it.  While your friends may not make a fuss about you using their content, a distributor who wants to license the game from you may have some qualms if you can’t show that you own every piece of what you’re granting.

To help you sort things out, here are three scenarios that may result in you not having chain of title.

  • Someone contributed and they didn’t sign over their rights.

This is essentially the scenario described above, but let’s dive in with a hypothetical: a team of people contributed to your pilot script.  Multiple writers had ideas, thoughts and story lines that ended up in the final draft.  Luckily, that draft has now been picked up by a network and production company, and deals are being put in front of you.  While the writers may say it’s cool, the network won’t see it that way.  They’ll ask who worked on it, and if you admit that there were multiple people, they’ll want to see your Writer’s Agreements.  If you don’t have them….that’s a problem.  The best case scenario will be that the network lets you hunt down your writers to get the paperwork, but the worst case is the network pulls the plug because it’s too much of a hassle and passes your script up for the next guy’s.  You may be thinking “can’t I just say I own it?”  Sure, but without proper work for hire language, that would be a lie.  If someone ever made a claim, you’ll have a lot of people upset with you and you may be liable for breach of contract, copyright infringement, and whatever other claims they can throw at you.  Better instead to take care of the contracts before you get to this stage, instead of risking it all because you didn’t want to make things awkward with your team.

  • You’re infringing on someone else’s work or otherwise using something without permission.

Have you ever included someone’s music in your sizzle reel because you thought it was public domain, or used a photograph you found online?  Maybe you wrote your entire script based on someone’s life but didn’t think to check with them.  All of these things affect chain of title, and without signed agreements or releases from the respective rights holders, you run the risk of a potential claim against you.  If there’s one thing a buyer doesn’t like, it’s buying a lawsuit.  Tempted to cry fair use?  Remember, fair use only comes into play once you’re already in trouble.  You may consider getting (or be required to get from a buyer) a Fair Use Letter from an attorney if you feel strongly that the material should be included and that you don’t need to pay for it, but it’s best to err on the side of caution and secure the rights.

  • You gave the rights to somebody else.

Don’t remember that other deal you signed from way back when?  Maybe you thought you only signed over part of your rights, or maybe you thought that the other deal had expired or terminated.  Be extra careful and make sure to review all agreements that could change or somehow affect your ability to perform under a new one – on top of representing that you have all the rights, many contracts also require you to represent that you aren’t breaching another agreement by way of signing this one.

Deals can fall apart quickly if an interloper comes out of left field claiming they have rights to your work and ought to be compensated.  Avoid weak links or a break in the chain and secure those rights early – otherwise, your project could be dead in the water.

Leah Norod

Associate Attorney

(212) 865-9848

See her full profile

The post Never Break the Chain (And Three Scenarios That Could) appeared first on Romano Law PLLC.

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Startup companies need funding, and entrepreneurs are rarely eager to turn away potential sources of investment.

Companies and entrepreneurs often see the initial appeal in using so-called “finders” to help them sell shares in their company to raise cash.  Though not formally defined, a “finder” is typically an individual or company that receives compensation in exchange for their raising money for your company (typically, a percentage of the amount raised, also known as a “finder’s fee”).

However, finders must be registered as broker-dealers with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), with very few exceptions; otherwise, both the finder and the company can face serious penalties.

What are “Broker-Dealers”? 

The Securities Exchange Act of 1934 (the “Exchange Act”) defines “brokers” and “dealers.”  A broker is defined broadly as “any person engaged in the business of effecting transactions in securities for the accounts of others…”  A dealer is defined as “any person engaged in the business of buying and selling securities … for such person’s own account,” but excludes a person that buys and sells securities for its own account, but not as part of a regular business.  Individuals who buy and sell securities for themselves generally are considered traders and not “dealers.”

Under federal securities laws, it is unlawful for any “broker” or “dealer” to induce or attempt to induce the purchase or sale of any security unless such broker or dealer is registered with the SEC.  Most state laws have similar regulatory schemes.

 The justification behind the broker-dealer registration rules is the protection of investors.

FINRA members are required to determine if an investment is suitable for potential investors.  On the other hand, unregistered “finders” seek transaction-based compensation for themselves, and will not necessarily conduct themselves with the interests of investors in mind as a FINRA member would be required.

Companies and finders face risks if broker-dealer licensing requirements are not satisfied. 

Among other penalties such as wide-ranging SEC enforcement actions, companies using an unregistered broker-dealer to assist with the sale of securities may be forced to return the money raised (the legal term is a “right of rescission”) to the company’s investors.  This is a serious penalty, which obviously creates even more challenges if the money has already been spent or is unavailable.

Additionally, the Exchange Act provides for aiding and abetting liability if the company knowingly or recklessly helped an unregistered broker-dealer (“finder”) to violate the Exchange Act.  Even if the company is able to survive after all this, it could nonetheless make subsequent rounds of financing more difficult.

Among other penalties such as SEC sanctions, “finders” acting as unregistered broker-dealers could be forced to forfeit their fee.  A “finder” who fails to disclose the fact that it is not registered as a broker-dealer could also be liable for a misleading omission that amounts to fraud.  The “finder” could also be barred from ever registering in the future.

This is by no means an exhaustive list of things to be aware of, and although there are exceptions to the registration requirements, they are very narrow.  It’s important that finders and companies alike keep abreast of all the rules to avoid “finding” trouble.

Please also see more information straight from the SEC’s website available at:

https://www.sec.gov/fast-answers/answersbdregishtm.html

https://www.sec.gov/reportspubs/investor-publications/divisionsmarketregbdguidehtm.html

Samuel P. Madden

Associate Attorney

(212) 865-9848

See his full profile

The post “Finder’s Fees” for the Sale of Securities: Exercise Caution appeared first on Romano Law PLLC.

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Life is unexpected.  Sometimes terrible things happen that will catch you off guard.  Don’t let that be the case for your business.  Have a plan in place for unfortunate possibilities. A buy/sell agreement between you and your business partner can dictate what should happen to certain aspects of your company if worse comes to worst..

When considering options for this arrangement, there are a few things to keep in mind.  Primarily, you want to know what to do if someone can no longer work with you in your business.  You also want to think about how to prevent portions of your business from being given or sold to someone you don’t necessarily want to be in business with.  These scenarios often come up when you’re dealing with death, disability, divorce, or bankruptcy.

For those situations, keep consider these options for your business:

In the case of a death…

  • Without a buy/sell provision, the ownership interest of the deceased business partner will pass to his or her estate, whether or not they have a will, meaning you’re stuck with whoever inherits the rights.
  • This provision can, but will not necessarily, force a sale of an owner’s shares upon their death.
  • It can also set a fixed price, or provide an easy formula for determining that price, so you don’t need to negotiate during a time of grief.
  • Some options:
  • Do nothing: the shares will pass on to the family. They can essentially step into the shoes of the deceased owner, and will often inherit all of their rights and responsibilities.
  • Option to purchase: the remaining business partner can opt to purchase the shares of the deceased member.
  • Forced sale: the remaining business partner is obligated to purchase (and the estate is obligated to sell) the deceased owner’s shares.  This is often accomplished by taking out a “key man policy” – a life insurance policy that will fund the purchase transaction if owner of the business passes away.

If someone becomes disabled…

  • In this sense, disability doesn’t need to be permanent.  The buy/sell provision will define how long a person must be unable to work in order to qualify as disabled.
  • The length of time often ranges from 90 days to 6 months in a single calendar year.
  • Some options:
  • Do nothing: unless the person has become so disabled that they are legally in the care of someone else, their membership interest will likely not transfer. If the person can overcome the disability, they can simply come back to the business.  If they do not, you may be in a situation with a business partner who is completely unable to assist in running the company.  However, if that partner is still well enough to negotiate terms, you can always do a normal purchase between yourselves.
  • Option to purchase: like above, the remaining business partner will have the option to purchase the disabled owner’s shares.
  • Forced sale: a disability will trigger a sale of the disabled owner’s interest in the company.  While doing this through an insurance policy is less common, it is possible.

In the event of a divorce or bankruptcy…

  • The risk in a divorce or bankruptcy situation is that an owner’s interest in the company will be given away or divided up with someone else, either a spouse or a creditor.
  • Aside from having a new business partner you may not have been planning on, it may lead to personal conflicts in the business, especially if the divorce was on bad terms.
  • Some options:
  • The most common arrangement is to say that any owner who obtains their portion of the company through a divorce or bankruptcy proceeding must immediately sell their interest to the other owners.
  • You could also force an owner to sell their interests if they get a divorce or go through bankruptcy, but this is less common and sometimes not necessary.

This is by no means an exhaustive list of what provisions you can have in your agreements, or the ways to protect your business should the worst happen. These agreements are highly customizable and can be tailored to fit your needs.

Marie Kym Smith

Associate Attorney

(212) 865-9848

See her full profile

The post Preparing for the Worst: Buy/Sell Agreements 101 appeared first on Romano Law PLLC.

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Let’s say someone wronged you, and you’ve been going back and forth with them for months in an attempt to resolve things.  You’ve finally agreed to settlement terms, but you aren’t sure you trust the person who stiffed you in the first place to comply.  To help with this, your lawyer is recommending you have them sign a Confession of Judgment, and the other side has agreed to do so.  What is a Confession of Judgment, and how does it put you in a better position?

First off, a Confession of Judgment is a signed confession of a legal obligation that can be filed with and enforced by a court without having to go through a trial.  It’s authorized in New York by NY CPLR §3218.  Put simply, someone who signs a Confession of Judgment is admitting to the court (and to you) that they owe you something.  You can predetermine a number either based on the actual damages caused or, in some cases, a larger sum of money (known as liquidated damages) when the harm isn’t an obvious dollar amount.  You can then take the confession to the county clerk and have it filed and enforced by the court in the event the opposing party doesn’t perform.  It’s an easy process if there are no mistakes, but be wary – something as minor as a misspelled name can hold up the process.

Unfortunately, you can’t simply walk the signed Confession of Judgment over to the court and call it a day.  In New York, you’ll need a few extra documents – a proposed judgment for the clerk to sign, an affidavit from the plaintiff confirming the facts, and a bill of costs.  The clerk may also deduct amounts already paid from the judgment if the debtor partially complied, so be aware of that before you file the paperwork.  Oftentimes the clerk will also ask for additional information, such as any written agreements that authorize the enforcement of the judgement in the event of a breach.

What civil situations might a Confession of Judgment make sense in?  Oftentimes they are used as part of a Settlement Agreement.  For example, let’s say someone owes you $10,000 and didn’t pay you.  You have them agree to a payment plan for the amount they owed you and you both sign a settlement, but you also have them sign a Confession of Judgment in the amount of $15,000.  If they breach the settlement and don’t pay the $10,000, you can enforce the $15,000 judgment.  However, keep in mind that in New York the clerk will typically deduct anything that’s already been paid.  So if the other side paid you $5,000, the most you’ll likely see is $10,000.  Still, you come out on top.  This acts as a great deterrent against non-payment – no one wants to be forced to pay more than they actually owed, especially if all they had to do was follow the rules.  Keep in mind that there’s a timeline involved -although you must file the Confession of Judgment within three years of its execution, you don’t have to wait until the person reneges on the settlement to take care of the administrative side.  However, the clerk will not enforce the Judgment until that breach occurs.

As you’d probably expect, filing a signed Confession of Judgment is only half the battle.  Collecting on the judgment and getting your cash is another matter entirely – we’ll cover that in Part 2.

Leah Norod

Associate Attorney

(212) 865-9848

See her full profile

The post Confession of Judgment Part 1: What is It? appeared first on Romano Law PLLC.

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