Parental Rights and Responsibilities in Vermont in the Age of Facebook
In a contested hearing held in Vermont Family Court, Mother and Father each request sole parental rights and responsibilities of their minor children.
Mother brings with her pictures of Father partying, drinking, and in compromising poses with the opposite sex, along with comments about how much he enjoys his night life, all posted on Facebook.
Father is appalled, first because he doesn’t know how Mother got those pictures, and second because he is afraid that they will negatively impact his case for custody of his children. He had never “friended” Mother on Facebook; so he thought he was safe.
This scenario is being played out more and more in the courts. Facebook has taken on an important role in many disputes, and lawyers have found Facebook postings can contain information that is useful in a court proceeding.
For those of you involved in divorce or parentage proceedings regarding parental rights, you can be rest assured that your mutual friends and your relatives—many of whom are your “friends” on Facebook, have taken sides, and some will inevitably take the other parent’s side in any custody dispute.
In addition, those “friends” who have taken the other parent’s side will be eager to let the other parent know about your postings on Facebook, especially the ones that make you look like a bad parent.
The first lesson is, then, for any litigant: imagine the item you are posting being presented as an exhibit in court—because if it is online, it will likely be easily accessible by your courtroom opponent. If you would be embarrassed to have a judge see what you are about to put online, do not click “post”.
Father’s second concern—the impact of the Facebook pictures and commentary on his case—turned out to be groundless. Why? Because under Vermont law, what your nightlife is like is not admissible in evidence unless it impacts your children.
Title 15, section 667 (a) provides as follows:
” Evidence of conduct of a parent not related to the [parental rights and responsibilities] factors in section 665 of this title shall only be admissible for the purposes of determining parental rights and responsibilities if it is shown that the conduct affects the parent’s relationship with the child.”
Thus if a parent goes out partying, that evidence will only be admissible if it can be shown that the children are neglected or otherwise adversely impacted as a result.
Facebook and other online social networks can be dangerous for any litigant. However, if the information is only about a person’s social life not related to the care of their children, the information will not be admissible in any custody action in Vermont.
Social Host Liability
“‘Tis the season” and over the next few weeks people will be gathering at office parties and to celebrate the season’s various holidays. Frequently those celebrations may include lifting a cup of holiday cheer…or two. If you are hosting a holiday party where alcohol is available you should keep in mind the potential liability you, as the social host, might have for party goers who have one too many celebratory drinks. In Vermont “social host liability” can be imposed in two ways: 1) through Vermont’s “Dram Shop Act” and 2) through the common law by claims of “negligence” on the part of the host. “Social host” liability for intoxicated party guests is limited but it’s worth understanding.
The Dram Shop Act is a statute prohibiting the sale or furnishing of intoxicating liquors to minors, to persons apparently under the influence of intoxicating liquor, to a person after legal serving hours or to a person who :it would be reasonable to expect would be under the influence as a result of the amount of liquor already served or to that person. Typically, the Dram Shop Act is applied to bars and restaurants that are caught either over serving patrons or serving alcohol to those under the age of 21. But the statute provides a civil cause of action to persons who are injured as a consequence of someone else being intoxicated against the person who “have caused in whole or part such intoxication by selling or furnishing intoxicating liquor.” The statute specifically excludes social hosts so long as they are not furnishing liquor for compensation or profit. But (and this is a very important “but” to consider) the Dram Shop Act does impose liability on a social host who “knowingly furnishes intoxicating liquor to a minor if the host knew, or should have known under the circumstances, that the person receiving the liquor was a minor.” The liability of a social host is not limited to just personal injuries caused by an intoxicated teen. Under the Dram Shop Act social host liability extends also to property damage and injury to someone’s “means of support.”
“Furnishing” under the Dram Shop Act (and under the common law) requires that the host had actual possession or control or otherwise took some affirmative act- such as purchasing- in providing the liquor to the guest. In an unreported case the Vermont Supreme Court affirmed the dismissal of a case in which the guest brought his own beer to a party, got drunk, and later caused a car accident that resulted in serious injuries to his passenger. Because the host had not supplied the beer to the guest it could not be said that the host had the “control” necessary to hold the host liable for the injuries caused by the guest’s intoxication.
Because the liability of social hosts is significantly limited under the Dram Shop Act, persons injured by others who are intoxicated will frequently bring a claim against the social host under the common law theory of “negligence.” To prove a negligence claim of any sort, there must first be a legally recognized duty of the defendant to conform to a certain standard of conduct so as to protect the plaintiff from an unreasonable risk of harm. A defendant who fails to live up to that duty is said to be “negligent.”
In 1986 the Vermont Supreme Court ruled that social hosts do not owe a “duty” toward intoxicated adults. In the case of Langle v. Kurkul the plaintiff was a social guest who became inebriated at a party, left the party and went to someone else’s house where he climbed a swimming pool railing with the intent of diving into the pool. The railing broke, he fell headfirst into the pool, broke his neck and became a quadriplegic. The guest then sued the host of the party claiming that the host was negligent in allowing a party guest to become intoxicated. The Superior Court granted the hosts motion to dismiss which asserted that the guest had failed to state a legal cause of action against the host, and the guest appealed.
The Supreme Court reasoned that while drunkenness, in itself, is a social problem, there was no compelling social policy reason that justified imposing responsibility on a social host for injuries the drunk caused to himself. However, the Court -looking to other jurisdictions- found that the common law did indeed recognize a duty of social hosts to third parties, but in limited circumstances. Where it was (or should have been) foreseeable that an intoxicated guest would drive an automobile when leaving the party the social host could be held liable for injuries the drunk caused to others. (While this issue was not integral to the case actually being decided, subsequent cases confirmed that in Vermont a social host can be held liable under such circumstances.) The “take away” is that social hosts need to make sure that drunk drivers are not leaving their party. If a drunk driver leaves your party and winds up harming someone else, you can be responsible. This is true even if the drunk goes to another party before getting into an accident- you will be in the chain of people who are sued. The question will come down to whether you knew, or should have known in light of the circumstances, that the individual was intoxicated when they drove off.
In the same case the Vermont Supreme Court recognized a common law duty of social hosts to third parties for harm caused by underage drinkers where the host either furnished the alcohol or had reason to know that underage drinking was going on. Allowing underage drinking to take place at your holiday festivities is illegal and can in serious fines and even jail time. It can also result in your being sued for harm caused by an intoxicated teenager even if that teenager wasn’t driving when he/she harmed a third party. Although there are no such recorded cases in Vermont, there are cases in other jurisdictions where social hosts are found liable for intoxicated teenagers who leave the premises, get into a fight and hurt someone else. (And as noted earlier, a social host can be liable under the Dram Shop Act when the harm caused is damage to property.)
The duty of social hosts generally doesn’t extend to the homeowner whose house is used for an underage party while the homeowner is away. In cases involving underage drinking out of sight of adults the courts will look to what the owner of the property could have reasonably foreseen. Where the party takes place with the property owner having no knowledge of the party and/or underage drinking, liability will not be imposed. In the case of Knight v. Rower the Vermont Supreme Court rejected the imposition of liability for injuries resulting from underage drinking on the individuals who owned the property where the drinking took place. The owners of the property (a camp) were not present at the party, had no knowledge that a party was taking place on that particular date, and in no way “furnished” or otherwise controlled the alcohol the teens drank. At best the property owners were aware that underage drinking had occurred at the property occasionally in the past. This was not enough to establish that the owners had been negligent on the date in question.
At the other end of the spectrum, however, is the situation where the parent buys a keg of beer for the party and then leaves for the weekend. Imposition of liability is much more certain in this case. Falling in between are those cases where the owner perhaps had allowed underage drinking at the home while the owner was there, or where the owner knew that the property- used for underage drinking in the past- was going to be the sight of another party on a particular date. Each of these factors suggest that it was reasonably foreseeable to the owner that underage drinking was likely to take place on the property. If the owner knew the teens were regularly raiding the liquor cabinet, but did nothing to stop it, liability will likely be imposed on the owner even if the owner wasn’t home when the party took place.
The holidays should be a time of relaxing with friends and family. But enabling or otherwise allowing underage drinking is clearly a risky business that should be avoided at all costs (during the holidays and at any other time of year.) Likewise, drunk driving is an activity that should be avoided and, where possible prevented. A little common sense- and an understanding of your legal obligations as the party host- will keep the happy in your Happy Holidays!
Want to Register your Trademark? Here’s How
Author’s Note: this article was produced with the able assistance of paralegal Michael Roosevelt, whose background in fine arts, printmaking and lithography (See his website here) sparked his interest in this subject. His practical knowledge of trademark law has have helped clients walk through the process of obtaining valid trademarks quickly and efficiently.
As new businesses begin to produce products and services, and old businesses produce new products or services, they should consider registering the trademarks or service marks (“marks”) associated with them.
Both trademarks and service marks can be registered at the federal level. Only goods – not services – can be registered at the state level in Vermont (Title 9, Ch. 71 of Vermont Statutes Annotated). Federally registered marks are protected throughout the United States – state registered marks are only protected in Vermont.
What is a trademark or service mark?
According to the U.S. Patent and Trademark Office, “A trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others.”
A trademark can take many forms which identify and distinguish specific goods or services. These include letters and words, logos, pictures, slogans, colors, distinctive product shapes; sounds, or a combination of the above.
As stated on the Vermont Secretary of State’s website, “Trademark is different from a business or trade name. The mark identifies the goods; the name identifies the entity which does business, such as selling the goods.”
How do you establish a trademark?
One approach is to establish use in the market and notice your claim to a mark by the use of the “™” symbol and other notices. Another approach is to directly register the mark with Vermont Secretary of State, or the U.S. Patent and Trademark Office to establish “first use.”
Why register?
For the consumer, trademarks make it easier for them to identify the source of a product. For the businessperson, a trademark protects against the unauthorized use of a confusingly similar mark. While, as indicated above, you do not need register a mark to establish its use in the marketplace, it is generally better practice to register your mark, particularly if you plan to use it extensively and for a long period of time. In addition, registering the mark will ensure that your mark is not infringing on other owner’s marks. As part of the registration process, the USPTO researches to make sure the trademark being registered is not currently in use.
How does the public recognize your trademark or service mark?
A trademark or service mark is identified by the use of the “™” trademark symbol on goods, or the “SM” service mark symbol when applied to services. These symbols place a viewer on notice that you are claiming the possession and use of these marks.
By registering a mark at the federal level, you increase your trademark rights. The “®” registration symbol indicates that a mark has been registered with the United States Patent and Trademark Office (“USPTO”). Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a)(1), provides federal protection against infringement of unregistered marks and trade names and many other forms of unfair competition.
How do you determine whether your mark has been infringed?
A mark is considered to have been infringed upon when someone other than the owner uses the mark in such a way as to cause confusion as to whose goods or services they are.
What are your rights if your mark is infringed upon?
First, you have common law rights to your mark even if you have not registered it, and you can file suit to protect those rights. However, federal registration of a mark brings the owner the right to initiate and infringement suit in federal court and may result in the owner’s recover of treble damages, attorney’s fees, and other awards.
Vermont registration also provides that an mark owner may bring suit to enjoin the use of the mark, and to be awarded damages. Vermont statutes do not provide for attorneys fees or treble damages, but they do provide that the state may file criminal charges against an infringer of the mark.
How to register?
Generally trademark rights can be acquired (1) by being the first to use the mark in commerce; or (2) by being the first to register the mark with either the Vermont Secretary of State (for a Vermont only mark) or the U.S. Patent and Trademark Office.
Applications for trademark registration are subject to approval by the USPTO and may be rejected for a number of reasons.
Examples of reasons why a trademark might be rejected are:
- It is likely to cause confusion with an already registered mark (such as McDonald’s” Hot Dogs)
- It simply contains a generic term (such as “Hot Dogs”).
- It primarily describes the geographic origin of the goods or services (such as “St. Johnsbury”).
- It is primarily a surname (such as “Smith’s”), etc
As stated on the USPTO website:
“For advice about trademarks and the USPTO registration process, you should consider hiring a private trademark attorney (not associated with the USPTO) to help you. Although not required, most applicants use private trademark attorneys for legal advice regarding use of their trademark, filing an application, and the likelihood of success in the registration process, since not all applications proceed to registration.
“A private attorney may save you from future costly legal problems by conducting a comprehensive search of federal registrations, state registrations, and “common law” unregistered trademarks. Other trademark owners may have protected legal rights in trademarks similar to yours that are not federally registered; therefore, those trademarks will not appear in the USPTO’s Trademark Electronic Search System (TESS) database.
“A private attorney can also assist in the policing and enforcement of your trademark rights. The USPTO only registers trademarks. You as the trademark owner are responsible for any enforcement.”
[U.S. Patent and Trademark Office page on trademarks
Cornell Law School list of trademark materials
U.S. Patent and Trademark Office www.uspto.gov.
Intellectual Property Law Association of Chicago www.iplac.org.
American Intellectual Property Law Association www.aipla.org.
Survey Results regarding enforcement of court orders
I confess that I have had frustrations over the years with the Vermont courts’ reluctance to enforce court orders in family court. In New Hampshire, where I practice family law occasionally, the attitude of the courts is quite different: just an allegation of violation of a court order will often result in an ex parte court order against the alleged wrongdoer–then a quick hearing to determine what other remedies, if any, should be imposed. That type of action by the court is unheard of in Vermont. Even when violation of court orders is proven, the wrongdoer is rarely punished–and even more rarely does the victim of wrongdoing receive an award of attorneys fees for his or her efforts to enforce an order. In my experience, attorneys fees are awarded less than 5% of the time they are requested, often making it uneconomical for a litigant to spend attorneys fees to request enforcement of an order. According to the results of our survey, the public agrees that court orders should be vigorously enforced. Here is the link to the survey: http://survey.constantcontact.com/survey/a07e4dcl8vigq80yd2t/start
Tax Planning For Graduated Rates
Tax Planning for Graduated Rates
By John H.W. Cole, Esq.
This article and several that will follow explore the elements of tax planning. Because a tax plan can be overwhelming when it is all put together my memos will develop the components one at a time. The first component is taking advantage of graduated tax rates.
Federal Income Taxes are imposed upon Taxable Income – Taxable Income is Gross Income less allowable deductions and exemptions. Gross Income is your income from all sources, most commonly wages and investment income.
Example: Ken and Barbie had a combined Gross Income of $212,700 in 2010. They had two dependent children which translates into $14,600 of personal exemptions. They file a joint return, and claim the standard deduction of $11,400.
Their Taxable Income for 2010 was $186,700 ($212,700 of Gross Income reduced by the standard deduction of $11,400 and personal exemptions of $14,600).
For 2010, the tax rates were as follows for married taxpayers filing jointly.
Taxable Income
- of the
-
But Not Base % on amount
-
Over Over Tax Excess over—
-
$ 0 $ 16,750 $0 10% $0
-
16,750 68,000 1,675.00 15% 16,750
-
68,000 137,300 9,362.50 25% 68,000
-
137,300 209,250 26,687.50 28% 137,300
-
209,250 373,650 46,833.50 33% 209,250
Ken and Barbie’s 2010 taxes were determined as follows:
- Income Tax Rate
- On their first $ 26,400 0 0% (offset by exemptions & deductions)
- On their next 16,750 1,675 10%
- On their next 51,250 7,688 15%
- On their next 69,300 17,325 25%
- On their next 49,000 13,720 28%
- Totals: $ 212,700 $ 40,408
Suppose that Ken had set up a qualified plan and deferred $49,000 into it. Ken and Barbie’s federal taxes would now be determined as follows:
- Income Tax Rate
- On their first $ 26,400 0 0% (offset by exemptions & deductions)
- On their next 16,750 1,675 10%
- On their next 51,250 7,688 15%
- On their next 69,300 17,325 25%
- Totals: $ 163,700 $ 26,688
By deferring $49,000 into a qualified plan, Ken and Barbie would avoid paying $13,720 in federal income taxes. If they lived in a state with a state income tax, like Vermont (9%), they could save another $4,410 in state income taxes. By avoiding paying payroll taxes on the $49,000 they would save another $1,421. Their total tax savings would be a combined $19,551.
Flash forward to 2011 when Ken and Barbie retire. Assume the same exemptions and the use of the standard deduction. They withdraw the $49,000 from the plan. Their taxes are determined as follows:
-
Income Tax Rate
-
On their first $ 26,400 0 0% (offset by exemptions & deductions)
-
On their next 16,750 1,675 10%
-
On the remaining 5,850 878 15%
-
Total $ 49,000 $ 2,553
The $49,000 of retirement plan income would not be subject to payroll taxes. In Vermont it would not be subject to state income taxes because it is below the state income tax threshold. Accordingly the tax savings from delaying a year would be $16,998. In Virginia, which imposes a state income tax on this amount of income, the tax savings would be slightly less, at $15,698.
Of course, Ken and Barbie may have other sources of income when they retire. However, the above example assumed retirement the following year, so a similar amount of outside income would have been present in both 2010 and 2011. An additional $40,000 of investment income would change their top bracket to 33% in 2010, while in 2011 an additional $40,000 would still be taxed at only 15%.
Furthermore, the example does not take into account the fact that tax brackets are indexed and that any increase in tax rates would only take place at very high income levels. In 1993 the 28% bracket for joint filers was $36,900 of taxable income. Today the 28% bracket starts at $137,650 of taxable income.
Let’s go back to the beginning and assume that Ken and Barbie did not defer the $49,000. Instead they paid their payroll taxes, and state and federal income taxes, and invested the money for 20 years, and enjoyed a 6% return. At the end of 10 years they would have accumulated $66,496, after taxes.
Sheltered in a qualified plan, the same $49,000 would have become $112,596, almost double.
Assume they took the entire $112,596 out at once, as their only income for the year, and that brackets never went up (although in fact they do). Their taxes would be determined as follows:
- Income Tax Rate
- On their first $ 26,400 0 0% (offset by exemptions & deductions)
- On their next 16,750 1,675 10%
- On their next 51,250 7,688 15%
- On their next 18,196 4,549 25%
- Totals: $ 112,596 $ 13,912
They would have $98,685 in after tax dollars to live on for the year, compared with $66,496 from investing on the outside.
The first lesson of this example is that some of your income isn’t taxed at all. Secondly, that which is subject to tax is taxed progressively starting with low tax rates. Third, significant taxes can be saved by shifting income from high tax rate years to lower tax rate years. The tax planning objective is to move income out of the 25%-33% federal bracket and 9% state bracket into the 15% federal bracket and 0-4% state income tax bracket.
The final lesson is that because of reduced income, rising brackets, or both, the low tax bracket years for most of us lie further down the road, when we retire, or at least slow down. The way to retire with the greatest amount of income is to take advantage of tax deferral vehicles, such as IRAs, SEPS, and qualified retirement plans.
For further information, comments, or questions, contact me at jcole@erisajd.com
In my next Article: Payroll taxes and the new Medicare Surtaxes
Attorney John H.W. Cole is now a contributing author to Law Matters
We are excited to announce that we have a new author for the Law Matters Blog
John H. W. Cole is an attorney licensed to practice in Vermont, Florida, the District of Columbia New York and Virginia. He is also admitted to practice in the U.S. Tax Court and U.S. Court of Claims. His office is located in South Burlington, Vermont
He formerly practiced as an attorney in the Chief Counsel’s Office of the Internal Revenue Service (1970-1973), and since then has been in private practice. He is a member Vermont Bar Association; The Florida Bar; Virginia State Bar; District of Columbia Bar and American Society of Pension Actuaries
He practices in the areas of design and implementation of Cash Balance Pension Plans, Profit Sharing Plans, and 401(k) Plans. He also advises clients on Plan Administration including reporting and disclosure; Employee Benefits Consulting; ERISA Litigation; Tax Litigation; Tax Planning; Formation of Business Entities; Estate Planning for Plan Distributions.
John will be writing articles on those topics.
He is editor of the 401k Advisor and contributor to Pension Plan Administrator. He has been a speaker at AICPA Employee Benefit Conferences; Accountant’s Satellite Television Network; Vermont Tax Institute; Florida and Virginia Bar Associations, and CPA Institutes in Florida, Virginia, and Maryland.
Attorneys, actuaries, accountants, HR managers and business owners will benefit from the information John will be providing in his upcoming articles.
If you have any issues or concerns in the areas of law in which John concentrates, here is his contact information:
John H.W. Cole, P.C. 3 Worcester Street South Burlington VT 05403-7235 Phone: 802-660-0148; 800-443-0264 Facsimile: 802-657-3957 Email: Jcole@erisajd.comVermont’s Lemon Law
Purchasing a motor vehicle is one of the largest and most important purchases consumers make. Most of us, however, have only a basic understanding of how a car operates or how to keep it in good working condition. When we purchase a vehicle (particularly a used vehicle) or bring it in for repair we find it necessary to put our trust in someone else. Trust that the car we are buying wasn’t damaged in a previous accident, has an accurate odometer reading, and trust that is in good operating condition. Trust that the repairs made were necessary in the first place, and that the repair will actually fix the problem.
There are some basic steps consumers can take to protect themselves when it comes to purchasing a vehicle; Read and understand the financing contract before signing it; read and understand any applicable warranty; know the seller and their reputation; take the vehicle to a mechanic of your own choosing for an inspection; thoroughly investigate the vehicle history. In Vermont there is no time period for returning a vehicle if you change your mind after you signed the purchase contract.
When it comes to car repairs, a consumer can also take a few proactive steps to protect themselves: know the mechanic and, perhaps most importantly, get the repair estimate in writing. There is no law in Vermont that requires a mechanic to stick to a quoted price if it’s not set out in a signed contract. If you are authorizing the garage to only make specific repairs, put it in writing. Ask about parts (will they be new or used) and labor costs- and have it put in writing.
Taking these few simple steps can often prevent problems down the road. But there may come a time when you are convinced that either a) the car you just purchased is a “lemon” or b) the mechanic is charging you for repairs that aren’t fixing the problem or don’t seem related to the problem in the first place. In such cases understanding your rights under Vermont’s “Lemon Laws” can help you save time and money.
“The New Motor Vehicle Arbitration Act”- aka Vermont’s “Lemon Law”
It’s important to know that the only “lemon law” on Vermont’s books applies to “new motor vehicles” which are defined as “a passenger motor vehicle which has been sold to a new motor vehicle dealer or motor vehicle lessor by a manufacturer and which has not been used for other than demonstration purposes and on which the original title has not been issued from the new motor vehicle dealer other than to a motor vehicle lessor.” The law generally does not cover consumers who purchase a used vehicle, whether from a licensed dealer or in a private transaction. (Alternative options available to buyers of used cars are discussed below.) Also excluded from the “lemon law” are tractors, motorized highway building equipment, road-making appliances, snowmobiles, motorcycles, mopeds, or the living portion of recreation vehicles, or trucks with a gross vehicle weight over 10,000 pounds.
Vermont’s lemon law requires that all new vehicles sold or leased in the state conform to applicable warranties. The obligation to make sure that the vehicle conforms to warranties rests on the manufacturer, not the dealer. If the consumer notifies the manufacturer or its agent (the dealership) of a nonconformity that substantially impairs the use, market value or safety of the vehicle then the manufacturer is legally obligated to make whatever repairs are necessary. (The manufacturer can delegate responsibility for the actual repairs to the dealer, but ultimately it is the manufacturer who pays for the cost of repairs.) The law further requires the manufacturer to give the consumer a written a) repair order b) summary of the consumer’s complaint and c) an itemized statement of all work done to repair the vehicle.
In many cases the first attempt to repair the vehicle will correct the defect. But what happens when multiple repairs are attempted and the defect is still not fixed? That’s where the “arbitration” part of Vermont’s “New Motor Vehicle Arbitration” law comes into play. If, after three attempts to repair the vehicle the problem is still not fixed or the vehicle (after one or more repair attempts) is out of service for 30 or more calendar days, then the consumer has the right to choose between a) the dispute mechanism set out in the manufacturer’s warranty (typically arbitration or mediation before a third party neutral chosen by the manufacturer) or b) the Vermont Motor Vehicle Arbitration Board. The manufacturer has the responsibility of notifying the consumer of the right to choose, and to provide the forms necessary to start the process. There is no fee required for either dispute mechanism. The choice must be carefully made- choosing one form of resolving the matter precludes resorting to the other option later on.
In either case the arbitration/mediation must take place within 45 days of the manufacturer or VT Arbitration Board receiving notice of the consumer’s request for dispute resolution. During the 45 day period the manufacturer has the legal right to make a final attempt at repairing the vehicle attempt. If the repair is successful to the consumer’s satisfaction, the arbitration process is terminated “without prejudice”- the consumer can restart the arbitration process if the repair fails during the remaining life of the warranty.
It is important to keep in mind that you cannot stop making lease or financing payments because of the defect and unsuccessful attempts to repair it. In fact the law specifically bars a person who has stopped making payments on the vehicle from the remedy available under the statute. Stopping payment could feel like the right thing to do, but in the end it will undermine your legal protections.
The VT Arbitration Board consists of five members and two alternates. By law one member of the board must be a new car dealer in Vermont, one member (and one alternate) must be “knowledgeable in automobile mechanics” and the remaining three must be persons “having no direct involvement in the design, manufacture, distribution, sales or service of motor vehicles or their parts.” The Board conducts a hearing by taking testimony from both sides, along with any relevant documents and testimony from witnesses. The issue for the board to decide is whether the defect substantially impairs the use, market value or safety of the vehicle even after repairs are made by the manufacturer. The board must issue its decision within 30 days of the hearing. The board’s decision can be appealed to the Superior Court, but only for very narrowly defined reasons (including corruption/impartiality/misconduct by the board). Otherwise the decision of the board is binding on all parties involved, and a manufacturer’s failure to comply with a decision constitutes an unfair or deceptive act in violation of Vermont’s Consumer Protection law (which potentially increases penalties against the manufacturer.)
Two forms of relief are available to the consumer who prevails before the board. The consumer has a right to choose to either a) receive a replacement vehicle of a similar make, model and option accessory package or b) return the vehicle to the manufacturer for a refund of the full purchase price. A reasonable allowance for the consumer’s use of the vehicle prior to the first repair attempt can be deducted from the refund. (The statute sets out a formula for determining a “reasonable allowance.”) In the case of a leased vehicle, the manufacturer could be required to either replace the leased vehicle or refund all lease payments made minus a reasonable use allowance. The manufacturer is allowed to put the vehicle back on the market for sale, but must affix to a window a conspicuous notice that the vehicle was previously adjudicated as having a serious defect. Notice that the vehicle was adjudicated as having a serious defect must also appear on the vehicle’s title.
In the next article we’ll discuss a consumer’s rights when the car in question is a “used vehicle.”
Vermont’s newest business entity: The “B Corporation”
Opening a “food establishment” in Vermont
This is the first in a series of articles meant to explore some of the legal requirements for starting a food related business. These articles are meant to be introductory in nature. The food service industry is extensively regulated at both the state and federal levels; more detailed consultation with an attorney before engaging in any business activity is strongly recommended.
Ever stood in your garden in the cool of a summer evening and thought to yourself “If only I had a dollar for every one of those zucchinis!” New Englanders have a long tradition of producing their own food and turning their gardens into extra income. In a down economy it comes as no surprise to find that this tradition has found recent momentum; today’s news frequently cites the resurgence of farmer’s markets, CSAs (“community supported agriculture”), farm to table/school programs and “locally produced food.” Growing your own food is a great way to stretch a household budget and controlling the quality of the food your family eats. For more and more people it’s also becoming a way to generate extra income.
But legally selling food you produce to the public is not quite as simple as planting seeds in the ground or baking up a batch of cookies. Both the state and federal governments have detailed requirements that must be met before your first sale can happen. The scope of regulation is directly related to the product you are selling. Meat, dairy and seafood/fish products are extensively regulated. Raw vegetables are generally at the other end of the spectrum and are not quite as heavily regulated- provided you are not selling across state lines.
For purposes of this article we will focus primarily on regulations related to “prepared foods”- defined in Vermont as “food that is heated, cooled, altered in any way from its original state or mixed with other foods for human consumption.” This broad definition covers a wide range of food products that a home producer might wish to sell, from canned dilly beans and pickles to soups, stews and sandwiches to baked goods. If your business plan is to sell a product within this definition there will be some level of regulation you need to become familiar with.
We will also narrow our focus by concentrating on those types of “food establishments” that home based businesses will most likely engage in: home/commercial catering, push carts and catering trucks, fair stands and farmer’s markets. We will not focus on opening or operating a restaurant, inn or bed and breakfast.
Generally applicable regulations:
There are some state regulations that are generally applicable no matter what sort of food establishment you plan to operate:
Taxes
Regardless of which type of food establishment you are planning on operating you will probably have tax obligations. Responsibility for the taxes on income will depend on the business entity you choose to operate under. Operating as a sole proprietor means the income from your business will be taxed as your personal income; operating as a corporation could mean (depending on the type of corporation setup) that business income is taxed as corporate and not personal income.
Regardless of the business entity, however, the State of Vermont imposes a “meals and rooms tax” on any person engaged in “charging for a taxable meal.” Prior to beginning business an operator of a food establishment must register and obtain a meals and rooms tax license. It is unlawful to operate a food establishment without first having this license. The license is non-assignable and nontransferable and must be surrendered if the business is sold or transferred or if the person listed on the license ceases to do business.
For purposes of the types of “food establishments” we are discussing, a “taxable meal” is any nonprepackaged food or beverage furnished within the state for a charge, regardless of whether the food is intended to be consumed on or off the premises.
There are exemptions to the tax. Foods such as raw vegetables, candy, flour, nuts, coffee beans, etc. are not subject to the meals and rooms tax. A sandwich made from raw vegetables, however, is subject to the tax as are any heated food or beverage whether or not they are “prepackaged.” (So while the chili you plan to sell from a crockpot is not necessarily “prepackaged” it is still within the scope of the tax.) Foods and beverages sold by nonprofits as a fund raiser are exempted, as are foods sold on the premises of a school. But as a general rule, anybody planning to sell a food product should expect to pay meals and rooms tax to the State.
Under the law, responsibility for payment of the tax rests on the operator of the business. It is unlawful for the operator to “absorb” the tax or not add it to the item sale price. The operator is required to maintain records that show separately the charge for the item sold and the amount of tax paid. These records must be kept for three years and are open for inspection by the tax commissioner at any time. Returns showing the amount of gross sales and the amount of tax collected must be filed, along with the actual tax payment to the state either quarterly (if total annual sales are less than $500) or monthly.
Labeling and Packaging
Anybody selling a packaged product (including preserves, pickles, baked goods, etc.) must comply with Vermont’s “Packaging and Labeling Law” and regulations. Some products such as meat, seafood, poultry and dairy must also meet federal label and packaging requirements.
Vermont’s law imposes three primary requirements:
1. The label/package must clearly identify the product. In some cases a generic name can be used (ie. Bob’s “beef stew”) but the label cannot be misleading or deceptive;
2. Quantity- the label must specify accurately the weight/volume of the product in the package. Quantity cannot be qualified or exaggerated as in “one JUMBO pound” or “one FULL gallon.” A pound is a pound and a gallon is a gallon.
3. Declaration of Responsibility: this is the name and address of the person/company who manufactured the product. If you are selling something that was manufactured by someone else, it must say so on the label. State law mandates minimum letter and number size for this information.
Much has been made recently about nutritional labeling. This is a requirement imposed by federal law. An exemption for small businesses is contained within the law, and most food producers in Vermont will qualify for this exemption.
Federal law also requires that any product containing two or more ingredients list those ingredients. Small producers are not exempt from this requirement. An accurate listing of ingredients is particularly important when your product contains an ingredient known to cause allergic reactions (milk, peanuts, shellfish, eggs, tree nuts, etc.)
“Organic” is a term found on many Vermont produced products and it is a term that more and more consumers are looking for. Federal law allows for the use of the term organic provided the food and its primary ingredients, have been grown, produced and handled as required by the Act. In Vermont the Northeast Organic Farming Association (“NOFA”) promulgates rules and oversees the use of the term “organic” on food labels and packages. More information can be found at the NOFA website.
In the next article we will begin to consider the legal requirements for operating specific food establishments.