Tuesday, May 31, 2016

Negative Online Reviews: What Can You Do?

Recent studies have found that 88% of customers have been influenced by an online customer service review and that almost half of job seekers had researched companies on GlassDoor, an online company review site.  If these reviews are negative (and particularly false), however, they can have a lasting negative impact on your business.

In some cases, businesses may have a claim for defamation against individuals who post false negative reviews online.  Ohio courts have defined defamation as follows:

"Defamation is the publication or communication of a false statement of fact that injures someone by adversely affecting the person's (1) reputation, (2) business, or (3) position by exposure to public hatred, contempt, ridicule, shame, or disgrace. The essential elements of a claim for defamation are that (1) the defendant made a false statement; (2) that false statement was defamatory in the sense that it reflected unfavorably on the plaintiff's character or injured his trade or business; (3) the statement was published or communicated; and (4) the defendant acted with the necessary degree of fault."  Fuchs v. Scripps Howard Broad. Co., 170 Ohio App. 3d 679.

The Columbus Dispatch recently reported on a lawsuit between a tenant accused of making defamatory comments that injured the landlord's business.

[James] Raney was a tenant at the Meridian Apartments in the Fifth by Northwest neighborhood of Columbus, then owned by Connor Group. While living there, he commented online about what he saw as conditions that fell short of the “luxury” described in marketing materials.

He moved out the complex but continued blogging about Connor Group.

Connor Group said Raney’s claims were false and harmful to the company, while Raney and his attorney argued that the online postings were constitutionally-protected opinion.

As in this case, the most difficult questions are often: 1) Were the negative statements presented as fact or opinion? and 2) Did the statements result in actual damages to the business?  

If your business has been adversely affected by negative online reviews, please contact our firm to discuss the best course of action. 

Wednesday, May 18, 2016

Ohio Real Estate Tax Exemptions For Charitable Uses

Article XII Sec. 2 of the Ohio Constitution permits the enactment of general laws exempting from taxation public school houses, houses used exclusively for public worship, institutions used exclusively for charitable purposes, and public property used exclusively for any public purpose. Pursuant to this authority the Ohio Legislature enacted Ohio Revised Code (the "ORC") §5709, "Taxable Property -- Exemptions."

The exemption for charitable uses is found in ORC §5709.12 and §5709.112. To be exempted from taxation under ORC §5709.12, the property must (1) belong to an institution and (2) be used exclusively for charitable purposes. True Christianity Evangelism v. Zaino, 91 Ohio St.3d 117, 118, 2001-Ohio-295, 742 N.E.2d 638, 639 (2001) Black's Law Dictionary (6 Ed.1990) 800, defines “institution” as: “An establishment, especially one of eleemosynary or public character or one affecting a community. An established or organized society or corporation. It may be private in its character, designed for profit to those composing the organization, or public and charitable in its purposes, or educational (e.g. college or university)." Any institution, irrespective of its charitable or non-charitable character, may take advantage of a tax exemption if it is making exclusive charitable use of its property. Wehrle Foundation v. Evatt (1943), 141 Ohio St. 467,[26 O.O. 29], 49 N.E.2d 52.

Statutes granting tax exemptions are interpreted strictly (Cincinnati Community Kollel v. Testa, 135 Ohio St.3d 219, 2013-Ohio-396, 985 N.E.2d 1236, ¶ 17.), so it is critical to ensure that the charitable use is both exclusive and charitable. If any part of the property is used for the purpose of profit making, that part of the property will be denied the exemption. Exemptions can be split if there is both an exempt and non-exempt use, and such splits will usually be made on a pro-rata basis based on the square footage or acreage used.

Sometimes the charitable use being made of the property is being made by an institution other than the title holder. This might be the case if a tenant is making an exempt use. Ohio Revised Code §5709.12(B) states that “[r]eal and tangible personal property belonging to institutions that is used exclusively for charitable purposes shall be exempt from taxation.” The words "property belonging to institutions" means ownership. Humphries v. Little Sisters of the Poor, 29 Ohio St. 201, 207 (1876). Possessing a leasehold interest, even under a long-term lease, is not ownership. See, e.g., Toledo v. Jenkins, 143 Ohio St. 141, 158–159, 54 N.E.2d 656 (1944); Evans Invest. Co. v. Limbach, 51 Ohio App.3d 104, 106, 554 N.E.2d 941 (10th Dist.1988). However, separating ownership and use is not be fatal to the exemption if the situation fits under ORC §5709.112. There, in certain cases exemptions can be granted for the use tenants make of the property if the property belongs to a charitable institution.

Reminder: The information presented is for informational purposes only and is not intended to be legal advice, and it should not be acted upon as such. It also does not constitute advertising or solicitation.

Monday, May 16, 2016

All In The Family: Do Job Applicants Match Your Company Culture?

According to a recent survey by the Conway Center for Family Business, about two-thirds of local family-owned businesses plan to increase hiring this year despite worries about finding qualified workers.  One of the major difficulties identified by leaders was finding applicants who fit with the existing company culture.

From the Columbus Dispatch:

For the first time, the survey found a growing number of companies that said finding someone who was the "right fit" for the culture of the business was a challenge. These would be applicants who embody the value and the culture of the business. 
The problem with hiring partly reflects a growing economy in central Ohio and family businesses that are doing well enough that they need to add staff. It also reflects the region's low 4.4 percent jobless rate. 

Among the survey's other findings:
  • 90% of respondents said the local economy was going somewhat well or very well.
  • After concerns about hiring, businesses expected to face challenges related to the costs of health care and materials.

Wednesday, May 4, 2016

Money Don't Matter 2 Night?: Prince Estate Complicated by Lack of Will

In 1991, recording artist Prince released a song entitled "Money Don't Matter 2 Night" with these lyrics:

Money don't matter tonight 
It sure didn't matter yesterday 
Just when you think you've got more than enough 
That's when it all up and flies away 

These lyrics may now have a new meaning for Prince's relatives. Despite hundreds of millions of dollars in assets, the music star apparently never took the time to make a will before he died last month at age 57.

From the New York Times:

Prince died without a will, according to court documents filed by his sister on Tuesday, potentially causing big complications for that star’s sprawling financial estate and musical legacy. 

In probate documents filed with the Carver County District Court in Minnesota, Tyka Nelson, 55, Prince’s sister, said that her brother died without a spouse, children or surviving parents, and that “I do not know of the existence of a will.” 

From the Minneapolis Star-Tribune:

If Prince left no trust or will, state law determines how the assets will be distributed. Attorneys say the more money there is at stake, the more likely there will be a dispute that could take years to sort out. 

For federal tax purposes, the only thing that matters is the value of the estate the day Prince died. By any measure, that’s a bundle. 

In addition to Prince's physical assets - such as homes or recording equipment - the star owned intellectual property rights such as song copyrights or the trademark to his "Love Symbol", as well as many unreleased songs. Each of those assets must be valued and then distributed as provided by the laws of Minnesota.

While most of us have assets far less than those of Prince, this is yet another reminder of the importance of considering your end of life wishes and consulting an estate planning attorney to ensure that those wishes are carried out.