By Attorney Edward Jesson
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Hearings were recently scheduled on a proposed North Carolina state bill entitled “An Act to Provide Consumer Protections Related to Roofing Repair Contractors.”

If passed, the law would have a big effect on the roofing industry in North Carolina--written contracts between roofing contractors and consumers would now be required. The proposed bill would require the following provisions to be included in these contracts:

     1. The roofing contractor’s contact information;
     2. The name of the consumer;
     3. The physical address of the property being worked on and a description of the structure being repaired;
     4. A copy of the repair estimate that addresses:
           a. a precise description and location of all the damage being claimed on the repair estimate;
          b. an itemized estimate of repair costs, including the cost of raw materials, the hourly labor rate, and the number of hours for each item to be repaired; and,
          c. a statement as to whether the property was inspected prior to the preparation of the estimate and a description of the nature of that inspection.
      5. Date the contract was signed by the consumer;
     6. A statement that the contractor shall hold in trust any payment from the consumer until the materials have been delivered to the job site or the majority of the work has been done;
     7. A statement providing that the contractor shall provide a certificate of insurance to the consumer that is valid for the time during which the work is to be performed;
     8. If the consumer anticipates that insurance funds will be used to pay for any portion of the job, a disclosure from the consumer that states that the consumer is responsible for payment if the insurance company denies the claim in whole or in part and a disclosure from the contractor that he or she has made no guarantees that the claimed loss will be covered by an insurance policy.

The new law, if passed, will also give the consumer the right to cancel the contract if the consumer’s insurance company denies the claim. Further, it will prohibit various practices from roofing contractors, including offering to pay insurance deductibles for the consumer or offering the consumer anything of value in order to display a sign or any other type of advertisement at the consumer’s property.

It is important to note that the proposed law specifically excludes licensed general contractors or subcontractors working underneath a licensed general contractor from the definition of “roofing repair contractors.”

While the new law would create an extra requirement that roofing contractors in NC may not be happy about, we always recommend having written contracts in place between contractors and the consumer. Too often the only written documentation is a cost estimate and, if there are any disputes, there are no provisions in these cost estimates for handling those disputes. The proposed law may also strengthen the reputation of the roofing industry by weeding out unscrupulous roofing contractors.

Jesson & Rains will continue to keep our clients updated on the passage of this law and are happy to assist with the drafting or review of any construction contracts. You can follow the status of the law yourself at: https://www.ncleg.gov/BillLookup/2019/S576.

By Attorney Kelly Jesson

​Business owners around the country are starting to reopen their businesses up to employees and customers. However, regardless of government announced “phases,” businesses owe a duty to their employees and customers to keep them safe while on the premises. Lawsuits are starting to pop up, according to Market Watch.

What can you do to limit your potential liability? Businesses should follow healthcare and government recommendations, such as wiping down surfaces, frequent hand washing, wearing masks, socially distancing, etc. These recommendations sometimes change, so business owners should stay abreast of updates. Keeping your employees from getting sick on the job in the first place is key: in a worker’s compensation case, all the worker has to do is prove they were injured on the job and there’s a causal connection between the two. For example, a grocery store cashier may have a claim due to exposure to the public. A worker’s compensation claimant does not need to prove that the business was negligent.

For businesses that don’t have a large volume of public traffic (such as law firms), owners may ask patrons to sign a document before coming into the premises stating that they do not have COVID-19, are experiencing no symptoms, and they have not been around anyone with COVID-19 or who has otherwise been experiencing symptoms. While patrons can, of course, lie on these forms, at least it’s one additional step that business owners can show that they are taking to
protect their employees and other customers. Showing that you are taking the necessary steps to keep people safe is important in defense of personal injury lawsuits, where the plaintiff has to show not only causation (that they caught COVID-19 at your business) but negligence (that you failed to act with reasonable care).

A defense to a negligence action is “assumption of risk.” Some business owners may ask patrons to sign waivers of claims, saying that the patron is “assuming the risk” of contracting COVID-19 by coming to their establish. For example, someone who voluntarily eats at a restaurant or goes to a nail salon knows that there is a risk that they may be infected, and a business is not guaranteeing 100% that they will not be infected, because there’s no way to do that.

Governor Cooper provided business owners with extra protection a couple of weeks ago when he signed the Coronavirus relief bill. The act provides for limited liability for businesses deemed “essential” under the Governor’s prior stay-at-home order. If an employee or customer gets COVID-19 from spending time at an essential business, the business is not liable for damages unless it is “grossly negligent” or worse. Gross negligence is a higher standard than simple negligence. Instead of a plaintiff showing the absence of reasonable care in a negligence lawsuit, a plaintiff would have to show the conscious disregard for reasonable care to prove that a business was grossly negligent.

While essential businesses should be comforted by this law, we are of the opinion that this should not change how they do business. In fact, if they consciously fail to abide by social distancing and cleaning protocols, they could arguably be grossly negligent.

If you have any questions about how to prepare your business for reopening, give Jesson & Rains a call!

By Attorney Kelly Jesson
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It’s hard to think about celebrating small businesses this month when so many are suffering due to coronavirus-related closures and illnesses. During this time of crisis, we’re right here with you, navigating these unusual waters.

We thought this would be a great time to feature one of our clients, Help Mask A Hero, who saw a life-or-death need and immediately sprang into action to fill the gap! Help Mask A Hero, Inc., is a North Carolina non-profit corporation, with its 501(c)(3) status pending. Founded by Charlotte’s own Dr. Lakesha Legree, owner of Elev8 MD Wellness Center, PLLC, and several other anesthesiologist colleagues, Help Mask A Hero uses donations to purchase coveted N95 masks to ensure that our frontline healthcare workers are receiving the PPE they need to treat COVID-19 patients AND stay healthy themselves. Help Mask A Hero also accepts donations of masks and other protective equipment. Help Mask A Hero has been featured all over major national news channels. We are so proud to serve them!

If you’d like more information, or to donate yourself, please visit: https://helpmaskahero.com
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To honor our healthcare workers, we are offering a discount for those who need their estate planning documents drafted. Please give Jesson & Rains a call for more information!

By Attorney Edward Jesson
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Whether good or bad, it is sometimes necessary to dissolve a corporation or limited liability company (“LLC”). If the business has no assets or liabilities, then closing down is relatively simple. However, business owners can get into trouble when they attempt to close down their businesses if it has remaining assets and liabilities. It is recommended that they work with an attorney. There are some subtle differences between dissolving an LLC and a corporation, but we are just going to use a corporation as an example below.

The first step in voluntarily closing a business in North Carolina is to file the articles of dissolution with the Secretary of State. Once the articles of dissolution are filed, the corporation still must adhere to its bylaws with regards to its directors and shareholders. However, the corporation is no longer allowed to carry on its normal business and must only do things in furtherance of winding up its affairs and liquidating. The North Carolina Business Corporation Act specifically states that a business may:

• Collect its assets;
• Dispose of property not to be distributed to shareholders;
• Discharge its liabilities;
• Distribute the remaining property to shareholders; and,
• Do any other act necessary to wind up and liquidate.

Any act further than those necessary to wind up and liquidate may invalidate the dissolution, which could have potential liability ramifications at a later date.

The next step in the process is liquidation. During this process, the owners of the business are responsible for selling assets and for settling the corporation’s debts. In the North Carolina Business Corporations Act, there are notice and publication procedures that a corporation can use to give notice of its dissolution or liquidation to creditors or potential creditors. While the Act does not impose any legal requirement to do so, it is beneficial for businesses to follow this procedure because it starts a clock and establishes deadlines within which creditors must bring claims.
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The potential claims against a corporation fall into two main camps: known claims and unknown claims. If a corporation sends written notice of its dissolution to known creditors, it can establish a claims due date of 120 days from the date of the notice. If the claim is not made by that deadline, the claim will be considered time barred. For unknown claims, a corporation must publish, among other things, notice of its dissolution in a newspaper in the county where the dissolved corporation has its principal office. This will start a five-year clock for unknown claims.

Generally, when liquidating a corporation, all assets of the corporation will be distributed to any creditors first and then to the shareholders. If the assets are not properly distributed (e.g. if a shareholder received assets instead of a creditor), then the aggrieved creditor could potentially file a lawsuit against the shareholder and against the directors who authorized the distribution.

As you can see, closing down a business can be a minefield for all involved. The attorneys at Jesson & Rains can help you close down your corporation or LLC properly or help you figure out alternatives to closing down your business.

By Associate Attorney Danielle Nodar
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After completing the numerous steps to form a business, business owners sometimes forget that they have to file annual reports with the North Carolina Secretary of State to keep their business active.

Each Business Corporation, Limited Liability Company (LLC), Limited Liability Partnership (LLP), and Limited Liability Limited Partnership (LLLP) must file an Annual Report. Limited Partnerships, Professional Corporations (PCs), and
Professional Limited Liability Companies (PLLC’s) do not have to file an Annual Report.

The due date for your business’s annual report depends upon the type of business. For corporations and partnerships (LLP and LLLP), the annual report is due to the Secretary of State’s Office the 15th day of the fourth month following the entity’s fiscal year’s end. For example, if your fiscal year ends on December 31, your annual report for that year is due on April 15th. The due date for LLC’s Annual Reports is April 15 each year after the date of creation. There is also a fee due each year when filing the Annual Report. For LLC’s and partnerships, the fee is $200 and for corporations, the fee is $25.

Businesses can file their Annual Report to the Secretary of State’s Office by mail, or they can file their Annual Report and pay the fee online via the Secretary of State’s website.

The Annual Report is used to keep the business records on file with the North Carolina Secretary of State up to date. On the Annual Report, you will provide basic information about your business, such as the nature of the business, the name and address of the registered agent, the principal address of the business, and the names and signatures of company officials.

The consequence for not filing an Annual Report and/or paying the fee is that the Secretary of State can administratively dissolve your business for failing to file the Annual Report. This means that you will lose the liability protection you enjoy by being a formal business, and a creditor can come after your personal assets.

It is important for business owners to make sure their registered agent information and email address is current throughout the year because the Secretary of State sends notices related to the Annual Report to the registered agent and the email it has on file for the business. We see a lot of businesses get dissolved and the owner does not even know because they have not updated their registered agent’s information in years (or paid their professional registered agent’s fee, who promptly drops them as a client).

If you are a business owner and have questions about filing your Annual Report or reinstating a business that has been dissolved for failure to file an Annual Report, contact Jesson & Rains.

By Associate Attorney Danielle Nodar

The California Consumer Privacy Act (CCPA), the strictest U.S. law regulating consumer data privacy, became effective on January 1, 2020. Even though the CCPA protects California consumers only, North Carolina business owners with E-Commerce businesses should take note because the law may apply to their business. The law applies to a business “doing business in California,” which includes selling goods or services to California residents even if the business is not physically located in California.

The CCPA gives California consumers certain rights to their data privacy, including the right to know what kinds of personal data a business collects, uses, shares, or sells to third-parties. Consumers will also have a right to request that a business delete any personal data kept on the consumer or prohibit the sale of personal data to third parties. The CCPA also protects a consumer with guarantees that a business will not penalize the customer with higher prices or lower levels of service if they request information regarding their data or data deletion.
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A business must comply with the CCPA’s data privacy requirements if it collects and sells consumer personal information of a California resident or discloses personal data for a business purpose. “Personal information” is broadly described as “information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular California resident or household.” This includes many identifiers such as name, address, social security number, email address, IP address, and geolocation data.

Since CCPA doesn’t just apply if a company sells data, it is important to understand how “business purpose” is interpreted under the statute. The CCPA defines “business purpose” as “the use of personal information for the business’ or a service provider’s operational purposes, or other notified purposes, provided that the use of personal information shall be reasonably necessary and proportionate to achieve the operational purpose for which the personal information was collected or processed or for another operational purpose that is compatible with the context in which the personal information was collected.” Some examples include 1) to fulfill the reason the information was provided (i.e. to provide the requested product or service); 2) administer websites; 3) perform market research; 4) advertise products and determine effectiveness of such marketing; 5) internal research for technological and business development; 6) debugging and repairing errors on websites; and 7) detecting against security incidents, including fraudulent or illegal activity.

Luckily, there is an exception for small businesses. For CCPA to apply, businesses must meet at least one of the following requirements: 1) Businesses with a gross annual revenue of $25 million or more; or 2) Businesses that possess personal data from 50,000 or more individuals, households, or devices; or 3) Businesses with at least 50% of their annual revenue earned from the sale of personal data.

If a business is subject to the requirements of CCPA, there are some steps that can be taken to ensure compliance. Prior to collecting data from consumers, businesses must inform the consumers of the categories of personal information the company collects and for what purposes the company uses the information. Companies must also provide consumers with at least two designated methods for submitting requests for information, including a toll-free telephone number and, if the business has a website, a website address. The business also must ensure it has protocols in place to respond to such requests free and within 45 days of receiving a verifiable request. The company must also maintain records of all requests made and how the company responded. A business can provide this type of information to consumers with an updated, comprehensive privacy policy that is easily accessible to consumers on the company’s website.
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If you believe that you may need to make your business CCPA compliant, contact Jesson and Rains for help with understanding and complying with these new data privacy regulations.