download - Contra Costa County Bar Association

Contra Costa 

LAWYER 

Volume 26, Number 2 | March 2013 

Tax Law / Fiscal Cliff 

The California Cliff 

by Mark Ericsson 

Is Congressional Budget Gridlock 

Here to Stay? 

by Thomas Del Beccaro 

CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 1

Perry A. Novak 

Senior Vice President - Investments 

UBS Financial Services, Inc. 

2185 N. California Blvd., Suite 400 

Walnut Creek, CA 94596 

(925) 746-0245 

perry.novak@ubs.com 

ubs.com/team/thenovakgroup 

You know there are more questions you should be asking, but 

you're not sure what they are. 

You want to stop procrastinating and make a decision, 

but you don't feel well enough informed. 

You know where you want to be, 

but you don't have a plan that will get you there. 

That's where we come in. 

The Novak Group at UBS Financial Services, Inc. 

Providing wealth planning and asset management services to affluent 

families, business owners and professionals since 1983. 

Trusted advice, caring support, prudent financial solutions. 

2 

MARCH 2013

TED AND HIS 

CALIFORNIA FORMS 

WERE INSEPARABLE. 

LIGHTEN YOUR LOAD WITH 

WESTLAW FORM BUILDER. 

Westlaw® Form Builder can take your California forms from tedious 

to streamlined, from time-consuming to cost-effective. This online 

document assembly tool delivers continually updated official and 

lawyer-tested forms from Witkin, Judicial Council of California, and 

other trusted sources, plus state-of-the-art automation to build them. 

No-charge linking to WestlawNext®, too! Embrace the future with 

Westlaw Form Builder. 

For more information, call 1-800-759-5418 or visit 

legalsolutions.com/formbuilder. 

© 2013 Thomson Reuters L-374258/2-13 

Thomson Reuters and the Kinesis logo are trademarks of Thomson Reuters. 


4 

MARCH 2013

2013 BOARD OF DIRECTORS 

Jay Chafetz President 

Stephen Steinberg President-Elect 

Candice Stoddard Secretary 

Nick Casper Treasurer 

Audrey Gee Ex Officio 

Richard Alexander 

Philip Andersen 

Dean Barbieri 

Amanda Bevins 

Oliver Bray 

Denae Hildebrand Budde 

CCCBA EXECUTIVE DIRECTOR 

Lisa Reep | 925.288.2555 | lgreep@cccba.org 

CCCBA main office 925.686.6900 | www.cccba.org 

Jennifer Comages 

Membership Coordinator 

Emily Day 

Systems Administrator and 

Fee Arbitration Coordinator 

Dawnell Blaylock 

Communications 

Coordinator 

Mary Carey 

Alison Chandler 

Elva Harding 

Peter Hass 

Reneé Livingston 

James Wu 

CONTRA COSTA LAWYER 

CO-EDITORS EDITORIAL BOARD 

Harvey Sohnen 

925.258.9300 

Nicole Mills 

925.351.3171 

BOARD LIAISON 

Candice Stoddard 

925.942.5100 

COURT LIAISON 

Kiri Torre 

925.957.5607 

PRINTING 

Steven’s Printing 

925.681.1774 

PHOTOGRAPHER 

Moya Fotografx 

510.847.8523 

Theresa Hurley 

Associate Executive Director 

Barbara Arsedo 

LRIS Coordinator 

Mark Ericsson 

925.930.6000 

Matthew Guichard 

925.459.8440 

Elva Harding 

925.215.4577 

Patricia Kelly 

925.258.9300 

Craig Nevin 

925.930.6016 

David Pearson 

925.287.0051 

Stephen Steinberg 

925.385.0644 

Marlene Weinstein 

925.942.5100 

James Wu 

925.658.0300 

The Contra Costa Lawyer (ISSN 1063-4444) is published 12 times a 

year - 6 times online-only - by the Contra Costa County Bar Association 

(CCCBA), 2300 Clayton Road, Suite 520, Concord, CA 94520. Annual 

subscription of $25 is included in the membership dues. Periodical 

postage paid at Concord, CA. POSTMASTER: send address change 

to the Contra Costa Lawyer, 2300 Clayton Road, Suite 520, Concord, 

CA 94520. The Lawyer welcomes and encourages articles and letters 

from readers. Please send them to contracostalawyer@cccba.org. 

The CCCBA reserves the right to edit articles and letters sent in 

for publication. All editorial material, including editorial comment, 

appearing herein represents the views of the respective authors and 

does not necessarily carry the endorsement of the CCCBA or the 

Board of Directors. Likewise, the publication of any advertisement 

is not to be construed as an endorsement of the product or service 

offered unless it is specifically stated in the ad that there is such 

approval or endorsement. 

Contra Costa 

LAWYER 

Volume 26 Number 2 | March 2013 

FEATURES 

DEPARTMENTS 

6 INSIDE | by Mark Ericsson 

7 PRESIDENT’S MESSAGE | by Jay Chafetz 

19 CENTER | Annual Officer Installation 

Introducing Judge Judy Johnson and Commissioner Anita Santos 

Judicial Demeanor Training | Women’s Section Powerlunch 

Meet Your Local Judges, Family and Juvenile 

30 COFFEE TALK 

How do you fix the congressional process? 

32 INNS OF COURT | by Matthew Talbot 

34 CLASSIFIEDS 

35 CALENDAR 

The official publication of the 

IS CONGRESSIONAL BUDGET GRIDLOCK 

HERE TO STAY? 


THE CALIFORNIA CLIFF 


ELEMENTS OF ATRA 

by G. Scott Haislet 

B A R 

A S S O C I A T I O N 

8 

11 

12 

BUSINESS TAX PROVISIONS OF ATRA 2012 

15 

by George Cabot 

IRS RETURN PREPARER REGS DERAILED 

by Warren Peterson 

DOMESTIC PARTNER COVERAGE RIGHTS 

UNDER THE CALIFORNIA INSURANCE 

EQUALITY ACT 

by Ralph L. Jacobson 

THE POPULATION CLIFF 

by Perry A. Novak 

17 

26 

28 


inside 

My dad always said, “Spare me exciting 

times.” By April first, the country will or 

will not have survived four near-death 

experiences. We have already survived 

the fiscal cliff with last minute legislation entitled the 

American Taxpayer Relief Act of 2012 (ATRA). Both parties 

grumble that the other side won. The Democrats got 

higher taxes on the rich while holding the Bush cuts on 

the not so rich. The Republicans did not lose their pressure 

points – the coming battles over the debt ceiling, 

sequestration and the budget. The rest of the Americas 

grumbled over the unmitigated gall of Congress to call 

the act “The American...” 

First, Congress will take up an increase in the debt ceiling. 

This week, the House passed a three-month extension. 

It was anticipated that the ceiling would have to 

be raised sometime in February. Now it looks like it may 

be sometime in May. 

The President has said he won’t negotiate over the 

debt ceiling. He argues that Congress passed the spending 

bills and it is up to them to increase the debt ceiling. 

In so doing, he has rejected the idea of coining a platinum 

one-trillion-dollar coin or raising the ceiling by fiat 

under the 14th Amendment, theories that would skirt 

the debt ceiling issue. The Republicans say they won’t 

raise the debt ceiling until they get spending cuts sufficient 

to cover the debt increase. Experts claim that a failure 

to raise the debt ceiling would end the world as we 

know it and would certainly change the way the world 

views us. Please spare me these exciting times. 

Second up is the fight over the sequester, a result of a 

Congress that could not come to a compromise on the 

debt ceiling increase last time around. To resolve the 

gridlock, Congress passed spending cuts in 2011 so onerous 

to both parties that a compromise seemed guaranteed 

before the January 31, 2013, effective date. A gridlocked 

Congress could not reach a compromise before 

2013 and the ATRA extended the effective date to March 

first, expecting that they can still reach a compromise. 

Einstein defined insanity as doing the same thing over 

and over again and expecting a different result. Enough 

said. 

Finally we face congressional confirmation of a budget. 

Don’t forget that Newt Gingrich shut down the government 

by blocking the passage of a budget. Just this 

week the House passed an act mandating that senators 

and representatives must pass a budget by April 15th to 

get paid. The Senate has been unwilling to pass a budget 

these last three years. Maybe this is the impetus needed. 

Mark Ericsson 

Guest Editor 

In this issue, we looked around for someone that 

could answer the question “How do we fix the congressional 

process?” and posed the question to the chair of 

the California Republican Party, soon to publish a book 

on the subject. We also asked Perry Novak to scare us 

with facts about the upcoming demographic changes 

in our society. In our feature article, Scott Haislet explains 

the American Taxpayer Relief Act in detail. In a 

companion piece, we look at the impact when you combine 

the effects of ATRA with California tax rates. George 

Cabot reviews the corporate landscape and the debate 

over lowering our internationally high tax rates. Ralph 

Jacobson brings us up to date on the rights of domestic 

partners under insurance policies. Warren Peterson 

warns us that tax preparers no longer must be registered 

with the IRS. 

I’m afraid to say that these are going to be very exciting 

times. My father must be turning over in his grave. 

One last thought: Is it a coincidence that there is no 

ethics credits being given in this issue? s 

Mark Ericsson is a partner in the tax and business 

firm of Youngman & Ericsson, has served as the 2006 

president of the Bar Association and is currently the 

chair of the Taxation Section. He has written over 30 

articles on tax and business issues. 

6 

MARCH 2013

CCCBA - It’s Your Organization 

president’s message 

By the time this reaches 

print, our organization will 

already have had its Installation 

Luncheon, where the 

new officers, directors and section 

leaders of the Contra Costa County 

Bar Association are installed in 

their positions. 

I know that I will have seen only 

a few of you there. I regret that this 

year especially, because those of 

you who did not attend missed a 

fascinating interview with our most 

recent appointee to the California 

Supreme Court, Goodwin Liu. Happily, 

that interview was videotaped 

and is available for viewing on our 

website. It is well worth watching. 

The Installation Luncheon is regularly 

attended by judges, CCCBA 

presidents, officers, and past presidents, 

CCCBA directors, and CCCBA 

section leaders. I often feel that after 

we have given recognition to all of 

these luminaries, there is no one left 

in the audience whose name has 

not been mentioned. We are an organization 

of 1,700 members. About 

125 of them usually attend the Installation 

Luncheon. 

Times have changed for our Bar 

Association. Before the early 1990s, 

when the State Bar first adopted 

mandatory continuing legal education, 

our Bar Association largely interacted 

with its members through 

a few well-attended bar-wide functions 

each year. After this change, 

our sections began to offer education 

credits at their programs and 

over the years most members of 

the Bar Association now have contact 

with the Association mainly 

through the sections. 

The Conservatorship, Guardianship, 

Probate & Trust Section has 

over 200 members. They had their 

annual luncheon a week after that 

of the Bar Association as a whole, 

and had even greater attendance 

than we had at the Installation 

Luncheon—and the people attending 

each function were largely different. 

The Family Law Section is 

also a large and active one with regular 

monthly programs, also very 

well attended. CCCBA is the umbrella 

organization that sponsors these 

sections, helps them advertise their 

programs, provides administrative 

and accounting support, and supplies 

the nonprofit corporation that 

lets them furnish their valuable 

networking and educational services 

to our members. So the mother organization 

is vitally important to all 

of our members even though many 

of them never attend anything 

more than events sponsored by the 

sections. We are the heart and lungs 

that let the body get where it’s going. 

Your board of directors has tried 

to be responsive to these changed 

times. Over the last several years, 

we have made changes that reflect 

our perception of the different 

things that you, our members, want 

and need from us. We dropped a second 

annual event called the State of 

the Court Address when attendance 

began to fall off. The event, in the 

current tough economic times for 

our state, ended up being just a depressing 

yearly recap of all the bad 

news about the budget cuts to the 

court system. We continually brainstorm 

about new programs that we 

might offer you or about possible 

changes to streamline and make 

more relevant the programs that we 

already offer. 

Unfortunately, we have little 

data to guide us. We do not have 

organization-wide elections to become 

officers of the CCCBA. The information 

we get about your likes 

Jay Chafetz 

CCCBA Board President 

and dislikes is fragmentary and anecdotal 

at best. 

So as I go about my duties this 

year, I want to make sure that each 

of you knows I have an open door 

policy. If there is a concern that you 

have about our organization or an 

idea you want to propose about 

how to make it better, please feel 

free to email or call me. 

Later this month, we are going to 

send you a survey. We will do our 

best to make it easy and quick to 

complete. Please participate in it. 

We want to serve you, and we can 

only know how to serve you if you 

tell us what you want. 

This is your organization, not 

mine or that of the other members 

of the board of directors. Do not 

think of it as something apart from 

you or, as it is tempting to think 

about government, something you 

have no control over and cannot 

change. I and the other directors 

are here to serve the organization, 

but even more importantly, to serve 

you. Take control of your organization. 

Tell us what you want it to be. 

And be sure to let us know how we 

are doing. s 


The United States national debt 

is higher at $16.5 trillion than the 

overall size of the U.S. economy. 

In 2012, America faced a so-called 

“fiscal cliff” that wasn’t resolved so 

much as it was put off to another 

day. We also know that the U.S. Senate 

has not passed a budget in four 

years. 

Is this the new normal for America? 

Or is there some solution to this political 

budgetary gridlock? In plain 

truth, while lack of leadership in 

congress is a problem, so much of 

America is either dependent on the 

federal government or doing business 

with the federal government, 

that the divisions in congress and 

America we see today are likely 

here to stay. 

As I detail in my upcoming book, 

The Divided Era, the partisanship 

Is Congressional Budget 

Gridlock Here to Stay? 


Chairman, California Republican Party 

The United States national 

debt is higher at $16.5 trillion 

than the overall size of 

the U.S. economy. In 2012, 

America faced a so-called “fiscal 

cliff” that wasn’t resolved so much 

as it was put off to another day. We 

also know that the U.S. Senate has 

not passed a budget in four years. 

Is this the new normal for America? 

Or is there some solution to this 

political budgetary gridlock? While 

lack of leadership in Congress is a 

problem, so much of America is either 

dependent on the federal government 

or doing business with the 

federal government, that the divisions 

in Congress and America we 

see today are likely here to stay. 

As I detail in my upcoming book, 

“The Divided Era,” the partisanship 

of today is different than at any time 

in our history. In the past, we have 

had very partisan eras featuring 

very difficult issues. The most divisive 

era in our history, the Civil War 

and Reconstruction Period, saw us 

decide issues with guns more than 

ballots. You cannot get more partisan 

than that. 

The adoption of the Constitution 

saw a political party do battle with 

its anti-party: Federalists versus Anti-Federalists. 

Imagine today if the 

two parties were called Democrats 

and Anti-Democrats or Republicans 

and Anti-Republicans. 

Now, however, we face a potentially 

more intractable problem. 

While the Civil War was a larger 

and more deadly issue, and while 

the adoption of the Constitution 

proved to be more than just a philosophical 

political fight for the ages, 

they both involved what I describe 

as closed-end issues. 

We adopted the Constitution, 

and while Hamilton and Jefferson 

fought about its meaning, just as 

some do today, the issue was resolved. 

We have a Constitution and 

we don’t have Articles of Confederation. 

That issue was capable of being 

decided once and for all. Similarly, 

we fought a Civil War and we are 

now one nation. 

Today, we face a different problem. 

When the Civil War ended, 

and even up to the year 1900, total 

government expenditures were less 

than 7 percent of the U.S. economy. 

Today, total government expenditures, 

from local government all the 

way to the federal government, are 

a staggering 33 percent. 

First, that means our governments 

are spending a lot more 

money. Predictably, we have the 

usual fights over the proper scope of 

government. Today, however, the 

number and fervor of those fights 

is growing right along with the size 

of the federal budget, which has 

grown over 300 percent in the last 

30 years. While this fight is not new, 

it is a growing problem. 

Second, our growing deficits, tax 

burdens and troubled economy are 

fostering an unprecedented competition 

between those seeking 

funding for current government op- 

8 

MARCH 2013

erations and those concerned with 

government pensions. Closely related 

to that are also: (1) the growing 

competition between public employee 

unions and taxpayers, and 

(2) the fights for taxes and funding 

between the states and the federal 

government over federal programs 

like ObamaCare. 

Third, and this is a critical point, 

the fact that our governments now 

represent one-third of the economy 

also means that our governments 

are doing more things than they 

have ever before – and by a wide 

factor. Those governments doing 

many more things lead to unprecedented 

partisanship that is at the 

crux of gridlock today. 

Simply put - a government that 

does but 100 things will find far 

fewer partisans than a government 

that does 1,000 things. Today, our 

governments all combined do $5 

trillion worth of things each year 

and we have many more partisans 

than our founders could ever imagine. 

As a result, we also have an unprecedented 

competition among 

those seeking government benefits, 

preferences and spoils doled out 

at all levels of our state, local and 

federal governments. Businesses, 

citizens, lobbyists, charities, government 

contractors and more compete 

for those spoils. Indeed, many businesses 

seemingly compete as much 

in the halls of our governments as 

they do in the marketplace. Many 

times, they can gain greater victories 

from government than they can 

in the marketplace. 

All of this adds up to the fact that 

the number of people doing business 

with our governments or dependent 

on them dwarfs the number 

of those people at any previous 

time in our history. The result of this 

new, “my piece of the pie partisanship” 

is people less driven by ideology 

and more driven by self-interest. 

Further, we see greater divisions 

among Americans and greater pressure 

to deliver the goods on the focal 

point of all of these competitions 

- our elected officials. 

Worse yet, the source of the current 

gridlock is not subject to any 

one close-end decision. To the contrary, 

our federal government is doing 

thousands of things which no 

single vote, war or legislative act 

“Simply put - a government that does but 100 things will find far fewer 

partisans than a government that does 1,000 things.” 

could resolve. As a result, we are 

likely to face division and gridlock 

for decades to come. 

Some choose to blame hyperpartisans 

in the major parties – and 

now the Tea Party – for our current 

gridlock. Partisans, however, are 

present in every age. For instance, 

Samuel Adams was considered incendiary 

as he sought revolutionary 

change in Boston. He was the 

leader of a mob and far more partisan 

than anyone in modern politics. 

He was essential, however, to our 

founding and the freedom that has 

spread across the world. Continuing 

the thought, John Adams stated 

outright that the Revolution would 

be attributed to another highly 

partisan writer of the age, Thomas 

Paine. 

Youngman & Ericsson, LLP 

1981 North Broadway • Suite 300 


The point is that for anyone to 

blame partisans is to blame the 

symptom, not the cause. It is human 

nature for people with so 

much at stake to be highly partisan. 

As lawyers, we should be no more 

surprised at their fervor than at the 

fervor of our clients whose cases 

mean their fortune to them, if not 

more. 

In short, we should stop blaming 

the participants and start focusing 

on the dynamic, which brings them 

to the fray. They are acting in their 

self-interest or for their personal 

ambition. The rules of the game accentuate 

their ambition and their 

natures. Should one company sit 

at home while another seeks an 

advantage in Congress? Should we 

really expect people being taxed to 

the point of moving not be vocal? 

California has lost over 4.5 million 

taxpayers since 1998, mostly to low 

tax states. We shouldn’t any more 

blame them than to blame our clients 

for filing lawsuits for their 

claims. 

So what are we to do? First, and 

this will be the hardest, we need 

to understand that there is no example 

in history of a government 

lasting as comparatively large as 

ours. Part of the story of Rome and 

Greece at their heights is bureaucratic 

breakdown and class warfare 

over stagnant economies and divisive 

tax schemes. It is not a story 

of governments getting their fiscal 

house in order. 

As such, we need to understand 

Estate Litigation Lawyers. 

www.youngman.com (925) 930-6000 


Budget Gridlock, 

cont. from page 9 

that growing government will lead 

to more division, not less. Each time 

we add to the size of government, 

we add to this unprecedented partisanship 

and potential for gridlock. 

We simply must stop looking 

to government for every happenstance 

or to resolve every inequity 

on the globe. 

Second, we need leaders that 

have the ability to focus voters on 

a common goal more than to divide 

their constituents. Reagan and Kennedy 

focused Americans on grand 

goals like restoring the economy 

and strengthening of our foreign 

policy goals. In both cases, Reagan 

and Kennedy relied as much on the 

private sector as on public sector activity. 

Both used tax cuts for all Americans, 

which bound people to their 

common presidential goal of reviving 

the economy. Kennedy challenged 

us to go to the moon and 

to join the Peace Corps. Reagan set 

a national goal for transcending 

communism. Those goals did not 

exclude any American from participating 

in their achievement. By creating 

goals for all Americans, goals 

that relied on private initiative, it 

made it easier for them to bring people 

together. 

Finally, as long as we have a tax 

system that pits one class of Americans 

against another, like our federal 

system, we can expect growing 

division. Taxing half of Americans 

and not the other half is the very 

nature of division. If we moved to 

a consumption-based tax system 

like many thriving states, we could 

minimize our divisions and grow 

the economy and revenues – all of 

IS PLEASED TO ANNOUNCE THAT 

IS PLEASED ARMAND TO ANNOUNCE M. ESTRADA THAT 

HAS RYAN JOINED W. LOCKHART THE FIRM AS 

OF COUNSEL 

HAS JOINED THE FIRM 

Mr. Estrada’s practice will continue to focus on business 

transactions, 

Mr. Lockhart 

intellectual 

focuses 

property 

his practice 

consulting 

in estate 

and licensing, 

construction, real property matters and related litigation. 

planning, wealth transfer planning, estate and gift 

Mr. Estrada provides arbitration and mediation services. 

tax planning, trust administration and probate. 

___________________ 

The Firm continues to concentrate on business, 

employment, estate and tax planning, 

The Firm continues to concentrate on 

real estate and related litigation matters. 

business, employment, estate and tax planning, 

real estate and related litigation matters. 

1333 N. California Boulevard, Suite 350 

Walnut Creek, California 94596 

Telephone: 925.944.9700 

Facsimile: 925.944.9701 

www.bpbsllp.com 

1333 N. California Boulevard, Suite 350 


Telephone: 925.944.9700 

Facsimile: 925.944.9701 

www.bpbsllp.com 

that would lead to less gridlock. 

Those are long-term changes we 

need to make as a society. In the 

short term, it will take an extraordinary 

president or Speaker of the 

House to forge a consensus around 

a new national goal to break the 

current deadlock. The number of 

divisions present today in The Divided 

Era, however unfortunately, 

are not likely to simply go away. s 

10 

MARCH 2013

The California Cliff 


California, the state that takes 

a backseat to no one, has 

certainly taken a backseat 

in the fiscal cliff debate. 

While all eyes were glued to the TV 

to watch the fight over how much 

the federal tax would bite the rich, 

California passed Proposition 30 

which raised California’s top tax 

rates nearly one and a half times as 

great as our federal counterpart, and 

we did it retroactively to the start of 

2012. 

Let’s look first at the rates we voted 

in by way of the proposition. The 

increases in California rates start 

at lower levels than the federal increases. 

For a single person, the top 

rate for those with incomes under 

one million dollars, formerly 9.3 

percent, increases to 10.3 percent at 

a taxable income of $250,000, 11.3 

percent at $300,000 and 12.3 percent 

at $500,000. The existing 1 percent 

surcharge kicks in at $1,000,000 taxing 

income in excess of $1,000,000 

at 13.3 percent. For married couples, 

the increases come at twice the income 

levels as for the single taxpayer. 

While the increase in the top 

rate nationally was an increase of 

13 percent over the 2012 rate, the increase 

in California was 32 percent 

over 2011, remembering the state 

increase was retroactive. 

For Californians with taxable incomes 

over $250,000, the news in 

California is not good. When you 

add in the effects of the alternative 

minimum tax, the ObamaCare investment 

tax and California capital 

gains policy, you can get some scary 

results. The alternative minimum 

tax was passed some 30 years ago 

to prevent high-income taxpayers 

from sheltering their incomes from 

tax. To calculate the tax, you first 

calculate your normal tax. You then 

calculate the tax without the shelter 

items to create a broader base 

and apply a lower rate. You pay the 

higher of the tax calculated by the 

two methods. 

One of the shelter items is state income 

tax. You do not get to deduct 

state income tax when calculating 

your alternative minimum tax. Taxpayers 

in states with high income 

tax rates like New York and California 

often get no tax benefit federally 

from paying state tax. Therefore, the 

two taxes are often additive. The 

combined tax rate for a single person 

with taxable income above $250,000 

is 45.2 percent; above $300,000 it is 

46.2 percent; above $400,000, it is 

50.8 percent, above $500,000, it is 

51.8 percent; and above $1,000,000, 

it is 52.8 percent. 

We then have the ObamaCare 

investment tax of 3.8 percent on investment 

income. All investment 

income over $200,000 for individuals 

and $250,000 for families is taxed 

at 3.8 percent. If you sell your house 

for a profit, you will certainly be 

subject to this tax. A lot of income is 

going to be taxed at 56.6 percent. 

Most disruptive is that in California, 

we don’t give any break for 

capital gains. The theory is that the 

California rates aren’t high enough 

to drive taxpayers out of the state. 

Thus someone with a capital gain 

from the sale of property or a business 

can incur a 12.3 percent rate on 

gains above $500,000 in addition to 

the 23.8 percent federal rate. 

I have a client who is going to 

sell his company for $150,000,000. 

He has asked me for instruction 

on how to cut his ties to this state. 

With 13 percent of his capital gain 

being taken by California, he sees 

no advantage in living in this state 

in a time where mobility is the big 

new thing. He will pay no tax if he 

moves to Nevada or Texas. The governor’s 

balanced budget assumes 

that no one is going to leave the 

state. Multiply the $18,500,000 in 

taxes the state is going to lose from 

this one taxpayer by the hundreds 

of others leaving and the budget 

loses its glamour. 

It is often noted that tax rates 

were much higher during the prosperous 

years of the Eisenhower administration. 

However, society is 

much more mobile now and work 

forces are much more competitive. 

Relocation is no longer a burden. 

Not only does California have 

America’s highest income tax rates, 

California has the nation’s highest 

sales tax rate, with counties that are 

looking to the more profitable real 

estate sectors to extract property tax 

and cities that are increasingly enforcing 

once lax gross receipts tax 

ordinances. 

One has to wonder why California 

needs the most pervasive tax 

regime by far of any state in the nation. 

s 

Mark Ericsson is a partner in the 

tax and business firm of Youngman 

& Ericsson, has served as the 

2006 president of the Bar Association 

and is currently the chair of 

the Taxation Section. He has written 

over 30 articles on tax and business 

issues. 


Elements of ATRA 

The American Taxpayer Relief 

Act (ATRA) became law 

on January 2, 2013. 

ATRA: (1) repealed the 

sunset of the Economic Growth 

and Tax Relief Reconciliation Act 

of 2001 (EGTRRA); (2) increased tax 

rate; (3) increased the capital gains 

rate; (4) re-introduced the “stealth” 

taxes by reduction of itemized deductions 

and personal exemptions; 

(5) created “permanent” alternative 

minimum tax relief; and (6) extended 

estate and gift tax exemptions 

established in 2010. 

ATRA relief retained some of the 

Bush-era tax policies and avoided 

government spending cuts, although 

resolution of the debt ceiling 

question has only been deferred. 

ATRA was a compromise. The 

administration wanted higher tax 

rates on incomes of at least $250,000 

(citing those successful families and 

individuals as “rich”), while Republicans 

resisted higher rates. The definition 

of rich settled at singles making 

over $400,000, and $450,000 for 

married joint filers. 

Repeal of EGTRRA 

Sunset 

EGTRRA provided significant tax 

breaks from 2001 through 2012, particularly 

in the area of capital gain 

rates, estate taxes and gift taxes. 

EGTRRA was scheduled to sunset 

after 2010, meaning that we would 

return to higher tax rates in effect 

before 2001. Both sides agreed to defer 

the EGTRRA sunset at the end of 

2010 to December 31, 2012, at which 

time the government would face its 

self-imposed fiscal cliff. 

When the dust settled, both sides 

claimed victory when they made 

by G. Scott Haislet 

EGTRRA permanent under ATRA, 

with no possibility of sunset in the 

future. 

Income Tax Rates 

ATRA retained existing 10 percent, 

15 percent, 25 percent, 28 percent, 

33 percent and 35 percent rates 

that prevailed pre-ATRA. Absent 

ATRA, these rates would have been 

materially higher. 

ATRA added a 39.6 percent rate for 

income above the applicable threshold 

of $400,000 for single taxpayers, 

$450,000 for married joint filers and 

$425,000 for heads of household. 

The applicable threshold will be 

adjusted annually for inflation. 

The tax brackets on which income 

is taxed at 10 percent, 15 percent, 25 

percent, 28 percent, 33 percent and 

35 percent will be adjusted annually 

for inflation. These favorable 

policies retain the “bracket creep” 

avoidance policy dating from the 

1980s. 

Capital Gain Rates 

ATRA retained the zero percent 

and 15 percent long-term capital 

gain rates. That means zero percent 

capital gain rate will apply to gains 

that would otherwise be subject to 

10 percent or 15 percent ordinary 

rate; 15 percent will apply to gains 

that would otherwise be subject to 

25 percent, 28 percent, 33 percent or 

35 percent ordinary rate. 

ATRA imposes a 20 percent longterm 

capital gain rate on income 

above the applicable threshold (e.g., 

above $450,000 for married joint filers 

and $400,000 for singles). That 

means that 20 percent capital gain 

rate will apply to gains that would 

otherwise by subject to the 39.6 percent 

ordinary rate. 

For example, it will be possible 

for a gain to be taxed partially at 15 

percent and partially at 20 percent. 

Long-term capital gain rates will apply 

to gains on sales of capital assets 

and on “qualified” dividends. A dividend 

is qualified if taxpayer holds 

the stock at least 61 days during the 

121-day period that begins 60 days 

before the stock goes ex-dividend. 

Note: a new 3.8 percent tax will 

apply to net investment income 

(interest, dividends, gains, etc.) for 

those with “modified” adjusted gross 

income of $200,000, and $250,000 for 

married joint filers; that tax began 

January 1, 2013, under federal tax 

code section 1411, which was adopted 

by Congress in 2010. Thus, top 

federal long-term capital gain rates 

are effectively 23.8 percent. 

12 

MARCH 2013

ATRA also retained the 25 percent 

rate on “unrecaptured section 1250 

gain,” which is taxpayer’s accumulated 

depreciation on real estate. Example: 

taxpayer buys commercial 

property for $1 million in 2005; taxpayer 

sells the property for $1.2 million 

on February 1, 2013, at which 

date accumulated depreciation 

was $100,000. Taxpayer will pay tax 

at applicable capital gain rate on 

$200,000 ($1.2 million minus $1 million 

purchase price) and pay 25 percent 

on $100,000 unrecaptured section 

1250 gain. Taxpayer will avoid 

both the capital gain tax and 1250 

gain tax in the event of a successful 

1031 exchange. The new 3.8 percent 

tax will apply to the unrecaptured 

section 1250 gain. 

Stealth Increases 

Without increasing tax rates, 

taxes increased during the Clinton 

administration by reducing deductions 

for personal exemptions and 

certain itemized deductions. EG- 

TRRA reduced those stealth tax increases 

in 2005-2008 and eliminated 

them from 2009-2012. Thus, for 2012, 

each individual was entitled to a 

personal exemption of $3,800 irrespective 

of income. A married couple 

without children would save 

$7,600 in taxable income. A married 

couple with two dependents would 

save $15,800 in taxable income. 

Under ATRA beginning in 2013, 

personal exemptions are phased 

out for adjusted gross income (AGI) 

over $250,000, and $300,000 for married 

joint filers. Beginning in 2013, 

itemized deductions for mortgage 

interest, taxes, charity, and miscellaneous 

deductions will be reduced 

for single taxpayers with AGI over 

$250,000, and $300,000 for married 

joint filers. The reduction of itemized 

deductions is 3 percent times 

that sum above applicable AGI. 

Alternative Minimum 

Tax (AMT) 

AMT is an alternative taxation 

system. Each individual taxpayer 

computes his income tax under the 

“regular” and “alternative” systems, 

paying the higher of the two. The 

regular system is AGI minus itemized 

deductions, minus personal exemptions, 

the result being taxable 

income subject to the tax rates discussed 

above. 

The AMT system is AGI, modified 

for certain items, minus itemized 

deductions (except that deductions 

for taxes and miscellaneous deductions 

are not permissible under 

AMT), the result being alternative 

taxable income subject to 26 percent 

or 28 percent rates. Note: many Californians 

fall into AMT because of 

high state income taxes. 

A relatively large personal exemption 

frees most taxpayers from 

AMT concern. The higher the personal 

AMT exemption, the more 

likely a person would not be subject 

to AMT. The previous permanent 

AMT exemptions were $45,000 for 

married joint filers and $33,750 for 

singles. 

Beginning with EGTRRA, the 

exemptions were temporarily increased 

with an AMT “patch”; laws 

Morrill Law Firm 

1333 N. California Blvd., Ste 620 • Walnut Creek, CA 94596 

Phone 925.322.8615 • Fax 925.357.3151 

Will & Trust Litigation 

Financial Elder Abuse 

Conservatorships 

General Civil Litigation 

Probate & Civil Appeals 

Mediation 

Joseph Morrill 

Andrew R. Verriere 

Nicole Morrill 

Paralegal 


Elements, 


enacted every one to two years after 

2001 to provide for relatively higher 

levels of AMT exemptions. 

ATRA has eliminated the need 

for future patches by adopting permanently 

higher AMT exemptions: 

$78,750 for married joint filers and 

$50,600 for singles. 

Estate and Gift Taxes 

Estate taxes are levied on a decedent’s 

assets valued at date of death. 

Tax law permits a person to transfer a 

sum of property and money to heirs 

or other individuals. The limit has 

varied over the years. The limit was 

$675,000 before EGTRRA, increased 

to $1 million under EGTRRA with 

additional increases until reaching 

$3.5 million in 2009. There was no 

limit for persons dying in 2010 (i.e., 

taxpayers died tax-free). 

Example: an unmarried person 

died in 2009 with net estate of $7.5 

million with no prior gifts. The sum 

of $4 million would have been 

taxed ($7.5 million net estate minus 

$3.5 million exemption). The $4 million 

is the decedent’s taxable estate. 

EGTRRA was supposed to sunset 

at December 31, 2010. Congress 

extended EGTRRA, implementing 

a $5 million tax-free transfer limit 

applied for 2011 and 2012, again 

subject to expire after 2012. ATRA 

extended the $5 million limit permanently, 

with inflation adjustment 

after 2011. 

Thus, the limit for persons dying 

in 2012 was $5.12 million, and is 

$5.25 million for persons dying in 

2013. The top estate tax rate in 2011 

and 2012 was 35 percent. ATRA increased 

that rate to 40 percent. 

That means, for example, that a 

single person dying in 2013 with 

$7.25 million net estate will incur 

$800,000 estate taxes, which is $7.25 

million minus $5.25 million, or $2 

million, times the 40 percent top estate 

tax rate. This example assumes 

that the decedent had made no gifts 

prior to death that would have reduced 

the lifetime exemption limit. 

Gift and estate taxes were “unified” 

in 2011 and 2012 and remain 

so under ATRA, meaning that a donor’s 

gifts during life or after death 

count against the lifetime exempt 

limit. Therefore, some donors give 

money and property to their heirs 

during their life up to a lifetime limit 

($5.25 million in 2013), because: 

(1) of concern that the government 

may reduce the limit in future, and 

(2) any appreciation on today’s gifts 

escape tax at the donor’s death. 

effectiveness 

While ATRA makes the $5 million 

limit permanent, nothing involving 

tax legislation is ever really permanent 

inside of the beltway, and 

that applies to all the permanent 

changes noted above. Thus, clients 

should consider inter vivos gifts to 

exhaust the lifetime gift exclusion 

in case it disappears. s 

G. Scott Haislet is a CPA and tax attorney 

in Lafayette. He is a certified 

specialist in taxation law, Board of 

Legal Specialization of California 

Bar. His practice includes tax planning, 

preparation, controversies, 

real estate matters, estate planning, 

and 1031 exchanges. He may be 

reached at (925) 283-1031 or scott@ 

goscott.com. 

Palmer Madden has conducted more than 

1,000 mediations since 1981. One jurisdiction 

reported that he has over a 90% settlement rate. 

experience 

His 25 years of experience as a trial attorney gives 

him an understanding about clients that has proven 

time and again to be critical in tough cases. 

efficiency 

He does not carry the overhead of other 

mediation firms (no administrative fees) - 

which means the price is always right! 

palmer brown madden 

925.838.8593 | WWW.ADRSERVICES.COM 

Over 25 years’ experience as an ADR neutral 

14 

MARCH 2013

Business Tax Provisions of ATRA 2012 

An extension of targeted incentives, but needed 

corporate tax reform must wait… 

When have budgetary 

and tax machinations 

in Washington 

generated so fertile a 

phrase, one so conducive to corny 

metaphor and other colorful figures 

of speech? I pledge in writing this 

article to avoid the use of the phrase 

“fiscal cliff.” Oops, I just did. Well, 

never again… 

The purpose of this article is to discuss 

those provisions of the American 

Taxpayer Relief Act of 2012 1 (the 

Act) of particular interest to business. 

The Act extends a variety of 

tax incentives for business, including 

15-year depreciation and bonus 

depreciation on certain property 

and Section 179 expensing (essentially 

100 percent depreciation on 

certain assets up to $500,000, subject 

to certain limitations). In addition, 

two very interesting corporate incentives 

were made retroactively 

applicable to 2012 and extended 

through the end of 2013. These are 

described and discussed in the first 

two sections below. The final section 

explores proposals for the corporate 

tax reform which are being 

seriously discussed in Washington, 

but which were not addressed in 

the Act. 

Qualified Small Business 

Stock 

In the June 2011 edition of CC 

Lawyer, this author reported on an 

economic stimulus provision relating 

to small business stock. See 

“Gains from Investments in Small 

Business Stock Acquired During 

2011 May Be Tax Free” [CC Lawyer 

June 2011]. Section 1202 of the 

tax code generally provides a 50 

percent exclusion of gain from the 

sale of “qualified small business 

stock.” Measures enacted in 2009 

and 2010 increased the exclusion to 

100 percent temporarily and thus 

allowed an investor to effectively 

pay zero percent tax on gains from 

QSBS purchased prior to the end of 

2011 and held for at least five years 

before sale. QSBS is defined in Section 

1202 as stock in a C corporation 

that: (1) has no more than $50 million 

in gross assets, and (2) engages 

in the active conduct of a qualified 

trade or business. 2 For a detailed description 

of the other qualifications 

and limitations of Section 1202, see 

“Gains.” California adopted the analogue 

of Section 1202 in 1993, allowing 

a 50 percent exclusion of gain 

for QSBS, but restricted eligibility to 

California businesses. California did 

not follow the federal lead in offering 

a temporary 100 percent exclusion. 

The Act extends the effective zero 

percent tax rate on capital gains 

from the sale of QSBS through the 

end of 2013. It provides a 100 percent 

exclusion of eligible gain received 

by an individual taxpayer 

from the sale of QSBS acquired after 

September 7, 2010, and before January 

1, 2014, and held for more than 

five years. In addition, gain from 

QSBS is excluded for alternative 

minimum tax purposes. Note that 

the Act has retroactive application 

to 2012. The exclusion had expired 

at the end of 2011. The Act both extends 

the exclusion through the end 

of the 2013 but also retroactively applies 

it to QSBS acquired in 2012. Absent 

another extension, beginning 

by George Cabot 

January 1, 2014, QSBS will again be 

eligible for only a 50 percent exclusion 

and the excluded gain will be 

a tax preference item for alternative 

minimum tax purposes. 

That is the good news. The bad 

news is that California’s 50 percent 

exclusion has recently been found 

to be unconstitutional by the Court 

of Appeals in Cutler v. Franchise 

Tax Board, (2012) 208 Cal. App. 4th 

1247, which held that the provision 

violates the U.S. Constitution by 

discriminating in favor of California 

businesses. That means that QSBS 

qualifying for partial or full exclusion 

for federal income tax purposes 

will still be subject to California income 

tax at rates up to 13.3 percent 

(capital gains are not eligible for 

preferential tax rates in California). 

Taxpayers who relied upon this exclusion 

in prior tax periods that are 

not closed by the statute of limitations 

are required to amend their 

returns and recompute their taxable 

income without the exclusion. 

From a planning perspective, the 

temporary 100 percent exclusion 

for QSBS makes the C corporation 

an interesting alternative to passthrough 

entities (LLCs and S corporations) 

for start-ups. In addition, 


Provisions, 


existing LLCs and S corporations 

may want to explore conversion to 

C corporation status prior to the end 

of 2013. Will the exclusion be extended 

beyond 2013 or made applicable 

for California income tax purposes? 

There is certainly reason to 

hope so, given that the economy is 

likely to remain very sluggish well 

beyond 2013 or even return to recession 

as a result of the anti-growth 

policies currently being pursued in 

Sacramento and Washington. 

S Corporation: Built-in 

Gains Relief Provision 

C corporations can gain the benefit 

of a single level of taxation by converting 

to S corporations. However, 

converted S corporations remain 

subject to tax on built-in gains on 

assets that existed at the time of 

conversion. If the S corporation disposes 

of any BIG assets during the 

10-year period following conversion, 

the realized built-in gains are 

taxed at the highest C corporation 

tax rate, currently 35 percent. As a 

result of economic stimulus legislation 

in 2009 and 2010, the holding 

period for BIG assets was reduced. 

For tax years beginning in 2009 and 

2010, the holding period was seven 

years. For tax years beginning in 

2011, the holding period was five 

years, meaning that in 2011 an S 

corporation could sell BIG assets 

held as little as five years without 

being subject to BIG tax. 

Like the relief provision for QSBS 

discussed above, this S corporation 

relief provision expired at the end 

of 2011. However, ARTA 2012 extended 

the five-year holding period 

through the end of 2013 and made it 

retroactively applicable to 2012. 

What Wasn’t in ATRA 

2012 (but may be on 

the horizon): 

The U.S. corporate tax system has 

grown increasingly out of sync with 

the corporate tax structures in other 

developed countries. The U.S. currently 

taxes corporate income at a 

top rate of 35 percent - the highest 

among advanced world economies. 

The average is closer to 25 percent 

in most of the developed world. 

Moreover, most of the other developed 

countries have a territorial tax 

system, under which a company 

is taxed only on income generated 

domestically. The U.S., on the 

other hand, taxes a corporation on 

its worldwide income. Tax credits 

are available for taxes paid in a foreign 

jurisdiction, but if those taxes 

are imposed at a lower rate (which 

will usually be the case) the U.S. 

corporation effectively pays the 

higher U.S. tax rate. U.S. taxation of 

foreign earnings can be delayed by 

keeping the earnings inside foreign 

subsidiaries, but the earnings will 

be subject to U.S. taxation when 

repatriated to the U.S. According to 

J.P. Morgan, U.S. companies control 

$1.7 trillion in foreign earnings held 

outside the U.S., a portion of which 

would doubtless be repatriated and 

used for investment in the U.S. but 

for the disincentives in the current 

corporate tax system. 

There is an emerging consensus 

on both sides of the political aisle 

that the U.S. corporate tax system 

needs to be reformed to make it 

more competitive. President Obama 

has at least paid lip service to the 

notion in the presidential debates 

last fall. Proposals for legislative 

reforms are being actively debated, 

and the impetus for taking action is 

strong given the serious imbalance 

between the U.S. corporate tax system 

and that of our major trading 

partners. 

The outcome of reform proposals 

is far from certain, but what would 

be the implications of a reduction in 

top U.S. corporate tax rates to something 

in the 25 percent ballpark? A 

top corporate rate significantly below 

the individual rate, currently 

39.6 percent, will reduce the tax 

incentive for forming pass-through 

entities (LLCs and S corporations). 

There was a time in the past when 

a similar dynamic prevailed. For example, 

in the 1960s and 70s the top 

individual rate was 70 percent, but 

the top corporate rate was 35 percent. 

In those times it was not uncommon 

for closely held businesses 

to operate as C corporations. It was 

even common to hold real estate in 

C corporations – something that is 

considered the height of lunacy today. 

Nonetheless, if we again see a 

significant rate differential, it may 

be “back to the future.” 

Even without legislative reform, 

the temporary extension of the 

100 percent exclusion for QSBS discussed 

above gives the C corporation 

a comparative advantage in 

some situations through the end 

of 2013, and maybe later if it is extended. 

s 

1 

P.L. 112-240, signed by the President on 

January 3, 2013. 

2 

The definition of “qualified trade or business” 

excludes investment companies, 

professional services and consulting, 

banking, insurance and other financial 

services, farming, oil & gas or mineral extraction, 

and the hotel, motel or restaurant 

business. 

George S. Cabot is a Partner at 

PremierCounsel LLP, with offices 

in San Francisco and Lafayette. 

George is a Certified Tax Specialist 

with a business transactional practice 

focusing on structuring business 

entities, M&A and entity level 

tax planning. 

Win A $100 GIFT CARD! 

We will be sending out a 

member survey via email this 

month and would greatly appreciate 

your feedback. When 

you receive it, please complete 

the survey for a chance to win 

a $100 gift card to the store 

or restaurant of your choice! 

16 

MARCH 2013

IRS Return Preparer Regs Derailed 

by Warren Peterson 

On January 18, 2013, the 

United States District 

Court for the District of Columbia 

decided Loving v. 

Internal Revenue Service, 1 derailed 

the IRS’ efforts to regulate hundreds 

of thousands of tax return preparers 

who are not attorneys, CPAs or 

enrolled agents with the IRS (hereinafter 

“unenrolled preparer”). The 

IRS had promulgated regulations 

that required unenrolled preparers 

to register with the IRS, pass a 

qualifying exam, pay an annual 

application fee and take 15 hours of 

continuing education each year. 

Three unenrolled preparers 

brought suit to enjoin the regulations. 

In an opinion issued just in 

time to throw things into a turmoil 

for this tax season, the District Court 

granted summary judgment to the 

plaintiffs finding that the IRS did 

not have the statutory authority to 

regulate unenrolled preparers. 

The IRS’ effort to regulate unenrolled 

preparers was prompted by 

Youngman & Ericsson, LLP 

1981 North Broadway • Suite 300 


Tax Lawyers. 

www.youngman.com (925) 930-6000 

the increasing importance of third 

parties and tax preparation software 

in the preparation of tax returns. 

In 2007 and 2008, over 80 percent 

of federal individual income tax 

returns were prepared by paid tax 

preparers or by taxpayers using tax 

preparation software. The IRS has 

estimated that there may be 1.2 million 

paid preparers. 2 

Organizations such as the IRS National 

Taxpayer Advocate 3 and the 

Treasury Inspector General for Tax 

Administration (TIGTA) 4 have each 

identified errors and omissions in 

the preparation of tax returns by 

both unenrolled preparers and national 

tax preparation chains. Many 

critics argued that the wide-open 

nature of the industry makes it difficult 

to ensure minimum competence 

and ethical standards for unenrolled 

preparers. 5 

The IRS has been focusing on 

this issue since June 2009, when the 

Commissioner of the IRS, Douglas 

Shulman, initiated the Return Preparer 

Review. The IRS solicited input 

from the public which led to the 

following recommendations: 

1. Mandatory tax return preparer 

registration. 

2. Mandatory competency examinations 

for unenrolled preparers. 

3. Required continuing professional 

education for unenrolled 

preparers. 

4. Extension to unenrolled preparers 

of the ethical standards established 

by Treasury Department 

Circular 230. 6 

The IRS implemented these recommendations 

by adopting regulations. 

The system was to go into full 

effect as of the beginning of 2013. 

The IRS reported that 88 percent 

of those expressing an opinion favored 

registration of unenrolled 

preparers. Those who addressed 

the issues of minimum education 

and testing requirements were 90 

percent in favor of such requirements. 

7 At the same time, others did 

not favor the direction the IRS was 

taking on regulation of unenrolled 

preparers. There were objections to 

the costs and burden the regulatory 

regime would place on return preparers, 

with the costs likely being 

passed onto taxpayers. 8 

This opposition to the new regulatory 

requirements prompted the 

filing of Loving. The District Court 

determined that the key question 

was whether tax return preparers 

are ‘representatives’ who ‘practice’ 

before the IRS” (Loving, p. 9). The 

court considered the meaning of 


IRS Return, 


statutory language about “presenting 

their cases” and concluded that 

normal usage of the term would not 

include the tax return preparation 

activities of unenrolled preparers, 

striking down the regulations. 

The IRS will file an appeal by early 

March 2013. 9 s 

1 

https://ecf.dcd.uscourts.gov/cgi-bin/ 

show_public_doc?2012cv0385-22 

2 

AICPA Tax Advisor, Regulation of Tax Return 

Preparers, May 1, 2011. 

3 

National Taxpayer Advocate, 2009 Annual 

Report to Congress, Vol. 1 (December 

31, 2009). 

4 

TIGTA, Inadequate Data on Paid Preparers 

Impedes Effective Oversight (2009-40- 

098), (July 14, 2009). 

5 

IRS Return Preparers Review, December 

2009, pp. 24-30. 

6 

Supra, pp. 3-4. 

Roger F. Allen 

510.832-7770 

Ericksen, Arbuthnot 

155 Grand Avenue, Suite 1050 

Oakland, CA 94612 

rallen@ericksenarbuthnot.com 

Northern California 

Mediator / Arbitrator 

16 years as Mediator 

25 years as Arbitrator 

33 years in Civil Practice 

• Training includes Mediation Course at 

Pepperdine University 1995 

• Serving on Kaiser Medical Malpractice 

Neutral Arbitrators Panel 

• Settlement Commissioner, Alameda and 

Contra Costa Counties 

• Experienced in all areas of Tort Litigation, 

including injury, property damage, fire loss, 

malpractice, construction defect 

7 

Supra, p. 2. 

8 

Supra, p. 32. 

9 

www.irs.gov/uac/IRS-Statement-on- 

Court-Ruling-Related-to-Return-Preparers 

Warren R. Peterson, a Danville 

sole practitioner, has been practicing 

law in one form or another 

for several years. He is a graduate 

of New York University School of 

Law and holds an M.S. in Taxation 

from California State University 

East Bay. Warren has extensive experience 

in various areas of corporate 

law and was employed as 

a Revenue Agent by the Internal 

Revenue Service. He is presently 

concentrating his practice in the 

area of tax conflicts, defending taxpayers 

in disputes with federal and 

California state tax authorities. 

— WANTED — 


think 

Matt Toth 

as in 

Pedder, Hesseltine, 

Walker & Toth, LLP 

oldest partnership in Contra Costa County 

(since 1955) 

p 925.283-6816 • f 925.283-3683 

3445 Golden Gate Way, P.O. Box 479 

Lafayette, CA 94549-0479 

AV Martindale-Hubbell 

David B. Pastor 

GET INVOLVED 

Learn more about the CCCBA, 

its sections, 

committees, 

and upcoming 

events at 

www.cccba.org 

ConServAtorShiPS 

ProBAteS 

CriMinAl DefenSe 

• Free Consultation • 

Law Offices of 

DAviD B. PAStor 

CCCBA MeMBer 

SinCe 1977 

www.davidbpastor.com 

1280 Boulevard Way, Suite 212 • Walnut Creek, CA 94595 

925-932-3346 • david@davidbpastor.com 

18 

MARCH 2013

Annual Officer 

Installation 

January 25, 2013 

The Honorable Barry P. Goode administering the oath 

Fireside Chat with the Honorable 

Goodwin Liu 

Board of Directors and Section 

Leaders taking the oath 

CCCBA 2012 President 

Audrey Gee 

CCCBA 2013 Board President Jay 

Chafetz presenting Richard Frankel 

with a plaque honoring his many 

years of volunteer service to the CCCBA 

Photos courtesy of Michael Moya, 

MOYA fotografx | ArType Studio 

www.moyafotografx.com 


Meet Your New Judge: 

Judy Johnson 

Administration of the oath by the Honorable 

Thelton E. Henderson 

Presentation of the judicial robe by 

Delores Fontenberry and Maxine Johnson 

CCCBA Board President Jay Chafetz presenting the gavel 

JUDY JOHNSON was inducted on February 1, 2013. She 

has been named as one of 20 “Women Leaders in Law” by The 

Recorder in 2011. Last year she came out of retirement and accepted 

an appointment by Governor Brown to the Contra Costa 

County Superior Court. 

The Honorable Diana Becton, Starr Babcock, Esq. 

and the Honorable Teri L. Jackson 

After graduating from King Hall School of Law at UC Davis, 

Judy became a legal aid attorney in Oakland, and soon after 

was appointed as Assistant District Attorney for the city and 

county of San Francisco. In 2000, Judy took the position as the 

State Bar’s executive director and served for 11 years, the longest 

that the position has been held in California history. 

Judy is also extensively involved in community affairs as the 

elected board president for the California Consumer Protection 

Foundation. 

The Honorable Willie Lewis Brown Jr. 

20 

MARCH 2013

Meet Your New 

Commissioner: 

ANITA SANTOS is excited to 

be the new child support commissioner. 

Prior to her appointment, 

Anita had a private practice in Solano 

County as a sole practitioner in 

family law since 2008. 

After graduating from UC Berkeley, 

Anita attended Hastings College 

of the Law in San Francisco. In 

1994, she began her career as a police 

officer in Concord. She moved 

on to become a deputy district attorney 

in Contra Costa County from 

1997 through 2008. 

Anita has been married to her 

husband, Mitch Celaya, for 17 years. 

Mitch is chief of police in Calistoga. 

They have four children: JC, 23 years 

old, Nile, 16 years old, Mateo, 12 

years old and four-year-old Lanissa. 

Anita Santos 


Judicial Demeanor 

Training 

In January, CCCBA members responded to the call from the CCC 

Superior Court for Pro Tem Judges. Participants in the Judicial 

Demeanor training classes learned about appropriate bench 

conduct, demeanor and decorum. Discussing potential scenarios 

led to much laughter among participants! 

The Honorable Jill Fannin and the 

Honorable Theresa Canepa 

Joscelyn Jones Torru and Helen Peters 

Katherine Wenger 

Women’s Section 

January 16, 2013 

Powerlunch 

Nicole Mills and Robin Krutzsch 

Margaret Grover, Michelle Thimesch, 

Ericka Ackeret and Michelle McGrath 

Lubna Jahangiri, Victoria Robinson Smith 

and Marta Vanegas 

22 

MARCH 2013

Meet Your Local Judges, 

Family and Juvenile 

February 7, 2013 

Andy Ross introducing the judges 

The Honorable Barry Goode, Luis Montes 

and the Honorable Barry Baskin 

Commissioner Anita Santos, Paula Grohs 

and Constance Figuers 

Barbara Suskind, the Honorable Rebecca 

Hardie, the Honorable Barbara Hinton and 

the Honorable Lewis Davis 

Peter Loewenstein, the Honorable Bruce 

Mills and Gary LaMusga 

Joe Wolch, the Honorable Trevor White 

and Lisa Reep 


The Women’s Section 

Annual Wine Tasting & 

Silent Auction 

Thursday, April 11, 2013 

5:30 pm - 7:30 pm 

Contra Costa Country Club 

801 Golf Club Road 

Pleasant Hill 

Dedicated to the Hon. Joyce Cram 

on the Occasion of Her Retirement and 

for Her Service to the Women’s Section 

Proceeds Benefit the Hon. Patricia Herron 

& Hon. Ellen James Scholarship Fund 

Pricing 

$15 for Students 

$30 for Section Members and Judges 

$35 for CCCBA Members 

$40 for Non-Members 

Delicious Wines & 

Tasty Hors D’oeuvres! 

Clothing Drive for Wardrobe 

for Opportunity! 

RSVP 

Online at www.cccba.org/attorney/calendar or 

contact Theresa Hurley at (925) 370-2548 

Info on Donations or Sponsorship 

Contact Megan Cohen at (925) 945-1880 or email 

megan@familyformation.com 

24 

MARCH 2013

RES IPSA JOKUITOR 

XVIII 

THE JOKE SPEAKS FOR ITSELF 

KICKOFF FOR FOOD FROM THE BAR 2013 

Benefitting the Food Bank of Contra Costa and Solano 

When: Wednesday, April 24 

Doors open 6:00pm 

Show starts at 8:00pm 

Where: Back Forty BBQ 

100 Coggins Drive 

Pleasant Hill 

Tickets: $60 

BBQ Buffet*: 6:30 - 7:30pm 

*Vegetarian option available 

upon request - contact Renee by 

April 15 at (925) 771-1310 

Bring a can of Beef Stew to enter 

a drawing for valuable prizes! 

GET YOUR TICKETS TODAY! 

For tickets, scan the 

QR code or contact 

Theresa Hurley at 

(925) 370-2548 or 

thurley@cccba.org 

Featuring: 

Will Durst 

Irish Newsboys 

with Barry Melton 

presented by 

benefitting 

*For sponsorship opportunities, 

contact Lisa Reep at 

(925) 288-2555 or lgreep@cccba.org 

Thanks to our Generous Sponsors!* 

BENEFACTORS 

Wells Fargo 

PATRONS 

Archer Norris 

Newmeyer & Dillon LLP 

The Recorder 

Steele, George, Schofield 

& Ramos LLP 

Timken Johnson LLP 

U.S. Legal Support, Inc. 

CONTRIBUTORS 

Certified Reporting Services 

Esquire 

Gagen, McCoy, McMahon, Koss, 

Markowitz & Raines 

Gil Berkeley 

Law Offices of Suzanne Boucher 

MassMutual Financial Group 

Miller Starr Regalia 

Scott Valley Bank 

Bring your checkbook to enter a raffle and bid on valuable silent auction items! 

As of February 12, 2013 


Domestic Partner Coverage Rights Under 

the California Insurance Equality Act 

by Ralph L. Jacobson 

GJEL Accident Attorneys 

Under California law, registered 

domestic partners 

are “two adults who 

have chosen to share one 

another’s lives in an intimate and 

committed relationship.” 1 The California 

Domestic Partner Rights and 

Responsibilities Act of 2003 required 

that registered domestic partners be 

provided the same rights, protections 

and benefits as spouses; and 

that they also be subject to the same 

responsibilities, obligations and duties 

under law. 2 

One year later, the California Insurance 

Equality Act 3 (hereafter referred 

to as The Equality Act) was 

enacted to mandate that insurance 

policies governed by the law provided 

coverage for the domestic 

partner equal to that provided for 

the spouse of an insured. It states: 

(a) Every policy issued, amended, 

delivered, or renewed in this state 

shall provide coverage for the 

registered domestic partner of an 

insured or policyholder that is 

equal to, and subject to the same 

terms and conditions as, the coverage 

provided to a spouse of an 

insured or policyholder. A policy 

may not offer or provide coverage 

for a registered domestic partner if 

it is not equal to the coverage provided 

for the spouse of an insured 

or policyholder. This subdivision 

applies to all forms of insurance 

regulated by this code. 

(b) A policy subject to this section 

that is issued…shall be deemed 

to provide coverage for registered 

domestic partners that is equal to 

the coverage provided to a spouse 

of an insured or policyholder. 

(c) It is the intent of the Legislature 

that, for purposes of this section, 

“terms,” “conditions” and 

“coverage” do not include instances 

of differential treatment 

of domestic partners and spouses 

under federal law. 

The Equality Act also amended 

Insurance Code Section 10121.7, regarding 

group health insurance, to 

read: 

“A policy of group health insurance 

that provides hospital, medical, 

or surgical expense benefits 

shall provide equal coverage to employers 

or guaranteed associations, 

as defined in Section 10700, for the 

registered domestic partner of an 

employee, insured, or policyholder 

to the same extent, and subject to 

the same terms and conditions, as 

provided to a spouse of the employee, 

insured, or policyholder, and 

shall inform employers and guaranteed 

associations of this coverage. A 

policy may not offer or provide coverage 

for a registered domestic partner 

that is not equal to the coverage 

provided to the spouse of an employee, 

insured, or policyholder.” 

Prior law had required group 

health care insurance plans and 

policies of group disability insurance 

to offer coverage for the domestic 

partner of an employee or 

insured to the same extent as coverage 

provided to a dependent. 4 That 

statute was amended by the Equality 

Act as well. This prior definition 

seemed to be at odds with the statutory 

definition of dependent, which 

was: 

“’Dependent’ means the spouse 

or child of an eligible employee, 

subject to applicable terms of the 

health benefit plan covering the 

employee...” 5 

On its face, this definition did not 

seem to include the domestic partner, 

leaving ambiguity. 

Prior to adoption of the Equality 

Act, there were also gray areas 

as to the contractual standard of 

what constituted a dependent in a 

health insurance contract. Most revealing 

in that regard is Prudential 

Ins. Co. of America, Inc. v. Superior 

Court, 6 which concerned whether 

or not a college student daughter of 

an insured was, or was not, a qualified 

dependent under her parents’ 

health insurance policy at the time 

she suffered catastrophic injuries. 

Under the policy, qualified dependent 

status was defined to include 

children of the insured over the age 

of 18 who were full-time students. 

In this case, the insured’s daughter 

had chosen not to enroll in school 

for the quarter following her freshman 

year due to personal problems, 

but she had retained the right to 

seek re-admission. Evidence from 

the school indicated that this was 

not an unusual circumstance; and 

the parents and student asserted 

she should be deemed a qualified 

26 

MARCH 2013

Elder Abuse Litigation 

Will & Trust Litigation 

• Conservatorships 

BARR & BARR 

ATTORNEYS 

318-C Diablo Road • Danville, CA 94526-3443 • (925) 314-9999 

Edward E. Barr (retired) 

Loren L. Barr* 

Christopher M. Moore 

Konstantine A. Demiris 

Tracey McDonald, Paralegal 

*Certified Specialist, Estate Planning, Trust and Probate Law, The State Bar of California Board of Legal Specialization 

dependent in light of her continuing relationship with 

her school at the time of the accident. But the appellate 

court, citing out-of-state cases on the same subject, held 

that the plain meaning of “full-time student” is “attending 

classes on a substantial basis.” Since the daughter 

had not met this requirement for the quarter in question, 

the court granted summary judgment in favor of 

the insurance company, and denied the daughter’s 

claim, finding that she was not a qualified dependent. 

Fortunately, prior to adoption of the Equality Act, 

there were no appellate cases which had to construe 

similar factual permutations of a partner’s status that 

might arise during a domestic partnership (part-time 

residency, lack of financial dependency on the other 

partner, etc.), in conjunction with this sort of murky notion 

of dependent status. The outcome would have been 

less than predictable, had such cases arisen. 

According to one commentator, these ambiguities 

caused real world problems for domestic partners: 

“Without a uniform definition [of dependency], confusion 

often resulted in the area of health insurance and 

domestic partners were routinely denied benefits and 

coverage, or were forced to pay higher premiums.” 7 

Under the Equality Act, there is now a “bright line” 

test: the domestic partner is indeed entitled to equal 

coverage as the named insured, without condition, and 

without the need for interpretation of dependency status. 

For this reason, if nothing else, the Equality Act has 

served its purpose: premiums can be calculated based 

upon the known status of a domestic partner; and domestic 

partners can be assured of the right to the same 

insurance contract health benefits purchased by their 

partner, or by their employer on their behalf. A longer 

term question will be to what extent, over time, these 

health insurance rights of registered domestic partners 

might become subject to preemption by either law or 

regulation under ObamaCare. s 

1 

Family Code § 207(a). 

2 

Family Code § 207.5. 

3 

Ins. Code, § 381.5, et seq. 

4 

Cal. Health & Safety Code § 1374.58(a). 

5 

Ins. Code, § 10700(e). 

6 

Prudential Ins. Co. of America, Inc. v. Superior Court (2002) 98 

Cal.App.4th 585, 600 

7 

Meredith A. Felde, California Insurance Equality Act: Providing 

Equal Insurance Coverage to Domestic Partners (2005) 36 Mc- 

George L. Rev. 917, 920. 

Ralph L. Jacobson is a founding partner of, and now 

of counsel to, the law firm of Gillin, Jacobson, Ellis, 

Larsen & Lucey in Orinda. 


The Population Cliff 

by Perry A. Novak 

Demography, the statistical 

study of living human 

populations, is one 

of those detail laden subjects 

that just doesn’t lend itself to 

much excitement, but demographic 

change is about to have a profound 

impact on the U.S. economy. 

Here Comes the Baby 

Boom 

Population change normally occurs 

at a glacial pace, unless there 

is an extreme outside influence. 

World War II was just such an influence, 

increasing the U.S. birthrate 

by more than four million annually 

in the years following the war. 

From 1946 through 1964 there were 

75 million births which gave rise to 

the term “baby boom.” 

When it comes to us boomers, no 

single group has had quite as profound 

an impact on the U.S. economy 

as we have. Boomers, who now 

range in age from 49 to 67, control 

over 80 percent of all personal financial 

assets, and account for more 

than half of all consumer spending. 

We are responsible for 80 percent of 

leisure travel, 77 percent of prescription 

drugs and 61 percent of overthe-counter 

drugs. 

The rise of the baby boom has 

caused tremendous growth in the 

U.S. economy, from the housing 

boom that started in the 1950s, to 

the creation of suburban living that 

changed the face of a previously 

agrarian nation. Unfortunately, the 

rapid retirement of the baby boom 

will accelerate some of the country’s 

most serious financial problems. 

Most of our large-scale consumptive 

spending occurs between the 

ages of 40 and 55, as we build our 

families and acquire the items we 

seek to make our lives more comfortable. 

After that, and especially 

as we approach retirement, our consumptive 

spending declines sharply. 

Consumer spending accounts for 

roughly 71 percent of U.S. gross domestic 

product (GDP). That is why 

the government usually deals with 

economic crises by trying to encourage 

consumers to spend. The changing 

demographics of the U.S. economy 

mean there will be fewer people 

in a position to spend us back to a 

robust economy. 

The second, more dramatic problem, 

is really two sides of the same 

coin. When we retire, we stop paying 

into programs like Social Security 

and Medicare and start taking out 

benefits. The money starts flowing 

the other way, so the costs of these 

programs rise dramatically just as 

their income is falling off sharply. 

More than 10,000 boomers a day 

began retiring in 2011 and that 

cycle will continue for most of the 

next two decades. More than 36 

percent claim they have nothing in 

retirement savings and 35 percent 

of those over age 65 are relying entirely 

on Social Security for their retirement 

income. An AARP survey 

found that 40 percent plan to work 

until they die because they did not 

plan or save for retirement. 

Social Security: Past and 

Present 

The Social Security program was 

created in 1937 and began paying 

regular benefits to retirees, age 

65 and older, in 1940. At that time, 

however, average life expectancy in 

the United States was just 58 years. 

If someone actually did live to age 

65, their remaining life expectancy 

was 12.7 years for men and 14.7 

years for women. 

When the program began, it covered 

workers but not spouses or 

dependents. It covered roughly 60 

percent of the active workforce and 

provided a benefit equal to 26 percent 

of pre-retirement income. According 

to the 1940 census, there 

were only nine million Americans 

age 65 or older, and only a small 

fraction of them received benefits. 

The program was originally adopted 

to aid retirement only. It did 

not include disability payments or 

Medicare, both of which were added 

much later. 

Fast forward to 1990, and the 

numbers had changed dramatically. 

The number of Americans age 

65 and older had climbed from nine 

million in 1940 to 34 million, comprising 

13 percent of the U.S. population. 

Life expectancy had climbed 

as well. An expansion of the original 

law now covered 96 percent of 

the workforce versus the original 60 

percent and benefits as a percentage 

of pre-retirement wages had 

climbed from 26 percent in 1940 to 

45 percent in the 1990s. 

The increased number of retirees, 

living longer and receiving larger 

benefits as a percentage of their preretirement 

wages, has resulted in 

the payroll tax rate being increased 

over 500 percent since the program 

first began. Fully 80 percent of 

American workers pay more in payroll 

taxes than they pay in income 

taxes. That is why the federal government 

temporarily reduced the 

employee rate two years ago in an 

effort to influence consumer spending 

and jump-start the economy. 

28 

MARCH 2013

Unfortunately, the rate reduction 

expired at the end of 2012 and was 

not extended as part of the Fiscal 

Cliff Tax Bill. The result is an annual 

increase in employee payroll tax 

withholding of roughly $120 billion, 

which will impact consumer 

spending and potentially lower 

U.S. economic growth by roughly 

one-half of 1 percent in 2013. 

The View from 2030 

Fast forward again, to the year 

2030. The number of Americans 

age 65 and older has more than 

doubled since 1990, rising from 34 

million and 13 percent of the population, 

to 69 million and 20 percent 

of the population. Life expectancy, 

which had been 12.7 years for men 

and 14.7 years for women in 1940, 

has risen to 18 years and 21 years 

respectively. 

Estimates from the Social Security 

Trust Fund say that payroll taxes 

will have to double from their 2013 

levels to cover the cost of providing 

benefits in 2030. Keep in mind, 

too, that these figures are for Social 

Security retirement benefits alone. 

They do not include the explosion 

in Social Security Disability costs or 

Medicare. Medicare alone cost $555 

billion in 2011, and is expected to 

see costs rise 75 percent by 2021, according 

to the Congressional Budget 

Office (CBO). 

A Wall Street Journal editorial 

published in November 2012 found 

that while the national debt is 

about $16.4 trillion now, it rises to 

$87 trillion if we take into account 

the unfunded Social Security liability 

– the amount owed over the 

lifetime of those people who are 

currently retired and drawing benefits. 

Turn the clock ahead 20 years, 

when all of us boomers are retired, 

and the unfunded Social Security liability 

rises to $202 trillion, according 

to a Boston University study. 

What Does a Trillion 

Look Like? 

A trillion is one of those numbers, 

like light-years, that is often 

cited, but hard to get a handle on. 

What does a trillion look like? One 

trillion pounds is roughly the combined 

weight of every single person 

on the planet. If you had a trillion 

bricks, you could build the 5,500 

mile-long Great Wall of China...and 

257 more just like it. A pile of 202 

trillion bricks, one for every dollar 

of unfunded future liability in the 

Social Security system, would build 

a Great Wall that would circle the 

earth almost 12,000 times. 

As our elected leaders wrestle 

with the debt ceiling, sequestration, 

the federal budget, national debt 

and deficit, and tax code changes, 

entitlement reform will be a constant 

topic of discussion and disagreement. 

Entitlement programs 

now consume every single dollar 

the federal government receives in 

tax revenue and the cost is rising 

rapidly. That is the real cliff. Let’s 

hope they find an answer soon. s 

AND MEDIATION CENTER 

“A unique and effective style - 

a great mediator” 

Candice Stoddard 

The Novak Group would like to thank the 

following sources of data used in this article: 

U.S. Social Security Administration 

(SSA); U.S. Census Bureau, U.S. Treasury 

Department, Congressional Budget Office 

(CBO), Office of Management & Budget 

(OMB); American Association of Retired 

Persons (AARP); Boston University; The 

Independent Institute; The Wall Street 

Journal; James Brown’s Option Investor; 

David Wessell, Red Ink: Inside the High- 

Stakes Politics of the Federal Budget; 

UBS Wealth Management Research – Art 

Cashin, Director of Floor Operations, New 

York Stock Exchange. 

Perry A. Novak, J.D., is a financial 

advisor and Senior Vice President 

at UBS Wealth Management 

in Walnut Creek, CA. Perry is an 

active member of the Taxation, and 

Business Law & Corporate Counsel 

sections. He has served as an advisor 

to the Joint Economic Committee 

of the U.S. House of Representatives, 

the California Society of 

CPAs and the California Medical 

Association. He can be reached at 

(925) 746-0245 or by email at perry. 

novak@ubs.com. 

Ron Mullin 

Willows Office Park p 1355 Willow Way, Suite 110 

Concord, California 94520 

Telephone (925) 798-3413 p Facsimile (925) 798-3118 

Email ronald@mullinlaw.com 


COFFEETALK! 

How do you fix 

the congressional 

process? 

You need a bunch of independents or a 

third political party of centrists. 

Jay Chafetz 

2013 Board President 

Fix the voters. 

Mark W. Frisbie 

Attorney at Law 

Make our elected representatives be subject 

to all of the laws they pass, including 

social security and health care. 

Joshua Genser 

Genser & Watkins LLP 

Elect Democrats! 

Joel Zebrack 

Attorney - Mediator 

I believe that our Congress members now 

focus almost all their efforts to re-election 

rather than taking care of the nation’s 

business. Free TV and newspaper ads 

and finding a way to interest the bulk of 

the citizens the political process would 

help. A fix must really wait to make the 

citizens angry enough to get out and vote 

in large numbers. 

Gerald T. Richards 

Attorney at Law 

I was a strong supporter of term limits 

until I worked in the State Assembly. 

Then I soon realized that with term 

limits, the only people in the Legislature 

with any “institutional memory” were 

the lobbyists and others who were only 

too willing to take the freshman lobbyists 

“under their wing” and show them the 

ropes. With (3) two year terms, they were constantly worrying 

about raising re-election campaign funds instead of 

learning their way around. The end result was that many 

were wholly ineffective – voting for the wrong reasons – 

either uninformed, or to get re-elected. I suspect Congress 

is like that on steroids. SO…my plan would be that everyone 

gets to serve in Congress for one six year term…period, 

and then they go home. That way, they would not be distracted 

by raising campaign reelection money 80 percent 

of the time, they would have more time to get educated 

and, most importantly, they would vote their conscience – 

do the right thing without regard to how that vote would 

affect them in the next election. Six years is enough time 

to learn and do some good but not so long that if you occasionally 

got a real loser in there we couldn’t weather the 

storm until they were out. 

Stephen Gizzi, Esq. 

Gizzi & Reep, LLP 

30 

MARCH 2013

Win A $100 

GIFT CARD! 

We will be sending out a 

member survey via email this 

month and would greatly appreciate 

your feedback. 

When you receive it, please 

complete the survey for a 

chance to win a $100 

gift card to the 

store or restaurant 

of your choice! 

Elder Law is 

Alzheimer’s 

Planning 

? 

You can take 

SELF-STUDY MCLE 

COURSES 

CCCBA offers MCLE self-study 

articles as well as audio and video 

self-study MCLE programs. You can 

get credit for a variety of courses 

including Detection/Prevention of 

Substance Abuse, Elimination of 

Bias and Legal Ethics. Go online to: 

www.cccba.org/attorney/mcle. 

? 

Did You Know? 

You can TRACK 

YOUR MCLE HOURS 

ONLINE 

You can access and print your attendance 

certificates for most of 

CCCBA’s MCLE programs. Log in 

and choose “My Past Events.” 

The average survival rate is eight years after 

being diagnosed with Alzheimer’s — some live as 

few as three years after diagnosis, while others 

live as long as 20. Most people with Alzheimer’s 

don’t die from the disease itself, but from 

pneumonia, a urinary tract infection or 

complications from a fall. 

Until there’s a cure, people with the disease will 

need caregiving and legal advice. According to 

the Alzheimer’s Association, approximately one 

in ten families has a relative with this disease. 

Of the four million people living in the U.S. 

with Alzheimer’s disease, the majority live at 

home — often receiving care from family 

members. 

If the diagnosis is Alzheimer’s, 

call elder law attorney 

Michael J. Young 

Estate Planning, Disability, Medi-Cal, 

Long-term Care & VA Planning 

Protect your loved ones, home and independence. 

n 

925.256.0298 

www.YoungElderLaw.com 

1931 San Miguel Drive, Suite 220 


? 

You can GET 

ASSISTANCE FROM 

CCCBA 

CCCBA offers help on fee disputes, 

client relations and access to directories 

for ADR, Experts, Judges and 

more. Go online to: www.cccba.org/ 

attorney/assistance-services. 

? 

? 

You can JOIN A 

SECTION 

Joining a CCCBA section gives 

you the opportunity to network 

and access to special events and 

programs. With low annual dues, 

you’ll receive discounts on most 

section events. Go online to: 

www.cccba.org/attorney/sections. 

You can FIND OTHER 

CCCBA MEMBERS 

Easily search online for other 

members by city, practice area, language 

or section. Log in and choose 

“Directory Search.” 

— WANTED — 

Will/Estate Contests 


You handle the estate, we do the contest. 

Cases, except conservatorships, often 

handled on a contingent fee basis, but can 

be hourly. Referral fee where appropriate. 

Pedder, Hesseltine, 

Walker & Toth, LLP 

oldest partnership in Contra Costa County 

(since 1955) 

p 925.283-6816 • f 925.283-3683 

3445 Golden Gate Way, P.O. Box 479 

Lafayette, CA 94549-0479 

AV Martindale-Hubbell 


inns of court 

by Matthew Talbot 

On January 11, 2013, Judge 

Craddick’s group (consisting 

of Jeremy Seymour, 

Nataly DiCortossa, Alison 

Chandler, David Marchiano, Heidi 

Coad-Hermelin, Harry Styron, Joseph 

Ryan, Matthew Guichard and 

Ralph Zappala) provided the educational 

presentation at the Robert 

G. McGrath Inns Of Court Meeting. 

Their presentation was about electronic 

discovery. It is often said 

(mostly by me) that discovery fights 

are the bane of every attorney’s existence. 

Nothing in this presentation 

helped dissuade me from that 

outlook. Even UFC fighters think 

discovery fights are too primitive 

and brutal. Technology has only 

complicated discovery in ways that 

few could have anticipated. The 

bottom line of the presentation was 

“never use technology ever.” 

First, Alison Chandler and Jeremy 

Seymour used a photo of Judge 

Craddick uploaded to Flickr to discuss 

meta-data. Meta-data is all 

the background information about 

electronic items (such as digital 

photos) that few ever pay attention 

to. They discussed how the iPhone 

tracks everything it does and everywhere 

it goes. This information can 

be discoverable and you might not 

have even known that it existed. 

The discussion next flowed to providing 

the electronically stored information 

(ESI). Federal Rule Of Civil 

Procedure 26(b)(2)(B) notes that 

you don’t have to provide the ESI 

if it is not easily accessible because 

of burden or cost. Nataly DiCortossa 

and Ralph Zappala discussed the 

enforcement of this rule. You can 

bring motions for a protective order 

or to compel discovery. These 

motions are generally a delightful 

experience not filled with minutiae 

regarding what constitutes an undue 

burden. Or the exact opposite of 

that sentence. 

The discussion flowed to setting 

up a Discovery Plan for the court 

if you end up in the middle of an 

ESI discovery fight. Additionally, 

the group discussed the duty to preserve 

ESI. You do not have a duty to 

preserve every piece of electronic 

information. If you have a standard 

policy (such as deleting ESI every 

90 days), it is appropriate. However, 

deleting ESI specifically to avoid 

discovery is about as big a no-no as 

you can get. Unless you slap your 

opposing counsel about the face 

and neck with a stack of document 

requests. And negligent destruction 

can even lead to sanctions. So, don’t 

leave all of your hard drives on the 

furnace during the winter. 

Matt Guichard and David Marchiano 

then focused on the protective 

orders. They discussed drafting 

them, including Liquidated Damages 

Clauses in the Protective Orders 

themselves. The conversation 

flowed to methods of production. 

Electronic discovery can include 

thousands or even millions of documents. 

It could easily overwhelm a 

smaller law firm. One way to assist 

with electronic discovery is to hire 

a vendor to organize the discovery. 

You can use in-house attorneys 

if you are a big enough firm, but 

32 

MARCH 2013

that can be expensive for the client. 

Some attorneys even outsource the 

organization and review process to 

foreign corporations. 

The key is to ensure that only appropriate 

documents are sent and 

nothing privileged is sent to opposing 

counsel. Casey McTigue introduced 

us to the concept of the 

discovery clawback. In that always 

awkward situation when you inadvertently 

provide a privileged document, 

you can basically demand 

that opposing counsel destroy the 

document without reviewing it. 

They have to destroy it and the privilege 

is protected! It is significantly 

more complicated than that, but I 

only have so many words. 

Joseph Ryan finished off the night 

with a further discussion of various 

privileges that can restrict document 

production. He noted that 

pursuant to California Evidence 

Code 917, if you claim privilege for 

a document, the opposing counsel 

has the burden of proof to disprove 

privilege. Disproving privilege can 

be incredibly difficult without reviewing 

the document giving the 

discovery respondent the advantage. 

All this discussion helped remind 

me to avoid discovery fights for my 

own mental sanity. The next meeting 

is March 14, 2013, at the Lafayette 

Park Hotel. To learn more about 

the Inns Of Court and get involved, 

contact President Scott Reep at (707) 

784-0900 or Scott@Solanolawgroup. 

com. s 

For more information on recent case developments 

regarding inadvertently produced 

documents, please see “The Ethics 

Corner” in the February 2013 issue of the 

Contra Costa Lawyer, which is available 

online at cclawyer.cccba.org. 

REAL ESTATE BUSINESS PLANNING ESTATE PLANNING 

EXIT, SUCCESSION & ESTATE PLANNING 

FOR BUSINESS AND PROPERTY OWNERS 

HUBERT LENCZOWSKI, J.D., M.A. * 

hubert@lenczowskilaw.com 

C. JOSEPH DOHERTY, J.D. 

jdoherty@lenczowskilaw.com 

* Adjunct Professor Taxation Golden Gate University 

Law School, LL.M. Taxation Program 


Jay Chafetz 

2033 N. Main Street 

Suite750 


Since 1949 

Rated AV by 

Martindale-Hubbell 

JAY CHAFETZ 

Personal Injury 

Trust & Estate Disputes 

Business Litigation 

Mediation (PI and Med Mal) 

Here for you when you need a trial attorney 

925.933.5890 fax 925.933.5620 

JayChafetz@JayChafetzLaw.com 

Bray & Bray 

Oliver W. Bray* 

Over 25 years in practice 

• Probate, Trust & Estate litigation 

and administration 

• Elder Abuse Litigation 

• Conservatorship establishment 

and litigation 

• Fiduciary court accountings 

• Estate Planning 

736 Ferry Street 

Martinez, CA 94553 

925-228-2550 

925-370-8558 (fax) 

brayandbraylaw.com 

lenczowski law - cccba advertisement (12-10-2012).doc 

LENCZOWSKI LAW OFFICES 

ATTORNEYS AT LAW 

1615 Bonanza Street, Suite 204 


T (925) 280 7788 

www.lenczowskilaw.com 

Free case evaluations for referring attorneys 

*Certified Specialist in Estate Planning, Trust and Probate Law – State Bar 

of California Board of Legal Specialization 

*Selected to Northern California Super Lawyers each year since 2006 


CLASSIFIEDS 

ACUNA CONSULTING EXPERTISE 

Attorney & Fiduciary Support Services 

Conservator, Probate, Estate Accounting. 

Practice management, system implementation 

and strategic business planning. Expert witness, 

professional; timely excellence. 

Loren R. Acuña, MBA, CPFL #534 

loren@ACEfiduciary.com | (925) 906-1882 

PROFESSIONAL OFFICE SPACE 

Currently subleasing up to four professional 

furnished offices within our spacious (11) office 

suite. Great views from the 10th floor of the 

California Plaza building in Walnut Creek, with 

great location near Walnut Creek BART station. 

Rent is $800-$900 per office (depending on 

the office size) on month-to-month basis. 

Alternatively, will consider reconfiguration of 

existing office layout and occupancy to provide 

for a longer term of a suite of up to four significantly 

larger offices, including a large secretarial 

station and signage – price and term 

to be negotiated depending on configuration. 

All subleases include telephone service with 

receptionist, high speed internet access, large 

kitchen and use on first come basis of two large 

conference rooms. A smaller secretarial station 

is also available in conjunction with leasing one 

or more of the smaller offices – price to be 

negotiated depending on how many offices are 

leased in the package. Contact, Jan Raymond 

via e-mail: mail@avmllp.com or by phone: 

925-939-9880. 

LAW OFFICE SPACE - 

WALNUT CREEK SHADELANDS AREA 

Three nice-sized offices in law office suite 

available. Two offices are interior and one is a 

window office. Each office is approximately 

140 square feet. Very comfortable surroundings 

with six other attorneys who all get along 

well. Secretarial/ paralegal spaces also available. 

Amenities include two conferences 

rooms, reception area, full kitchen, library, full 

bathroom with a shower, individual climate 

control, security, copiers and more. Fast internet, 

secretarial help, and copiers are available. 

Close to trails. Ample free parking. For more 

information, please call Kari at (925) 256-9855. 

***ATTORNEYS ONLY*** 

WALNUT CREEK OFFICE SPACE 

Three beautiful window offices with secretarial 

stations available to share in well-appointed 

nine-office attorney suite. Can rent 

the offices individually. Located on the seventh 

floor in Two Ygnacio Center in downtown 

Walnut Creek, one block from BART. Includes 

receptionist services, and use of conference 

rooms, law library and kitchen. Underground 

parking available. Call Elliot (925) 947-1333 

PROBATE PARALEGAL 

TO ATTORNEYS 

Joanne C. McCarthy. 2204 Concord Blvd. 

Concord, CA 94520. Call (925) 689-9244. 

CONCORD LAW OFFICE NEAR BART 

On Clayton Road. 1 or 2 Offices with Library, 

Kitchen, Reception Area. Free Parking. Overflow 

Cases Possible. Call Joe at (925) 687-9121 

advertisers’ index 

ADR Services ........................4 

Roger F. Allen ..................... 18 

David Arietta ...................... 39 

Armanino McKenna .............. 32 

Barr & Barr Attorneys .............. 27 

Bray & Bray .........................33 

Buchman Provine 

Brothers Smith LLP .................10 

Jay Chafetz .........................33 

Diablo Valley Reporting Services ..40 

Margaret M. Hand..................10 

Lenczowski Law Offices ............33 

Morrill Law Firm ...................13 

Mullin Law Firm . . . . . . . . . . . . . . . . . . 29 

Palmer Madden ................... 14 

Perry A. Novak , 

UBS Financial Services, Inc. ............ 2 

David B. Pastor .................... 18 

Pedder, Hesseltine, Walker 

& Toth, LLP......................18, 31 

Scott Valley Bank .................. 39 

Candice Stoddard .................. 39 

WestlawNext, 

Thomson Reuters ....................3 

Michael J. Young ...................31 

Youngman & Ericsson, LLP ......9, 17 

Zandonella Reporting Service ......4 

34 

MARCH 2013

CALENDAR 

UPCOMING EVENTS | OVERVIEW 

March 12 | Alternative Dispute Resolution Section 

ADR Roundtable: Using ADR to 

Resolve Discovery Disputes 

more details on page 36 

March 15 | Real Estate Section 

Recent Developments for the Intersection Between Deeds 

of Trust and Article 3 of the Commercial Code 


March 15 | Family Law Section 

How Children’s Development and Sexual Behavior 

Impacts Custody 


March 21 | Employment Section 

ERISA - Employment Retirement Income Securities 

Act Basics for Employment Law Practitioners 


April 10 | Family Law Section 

Social Security & Retirement - Effect on Spousal Support 


April 11 | Women’s Section 

Annual Wine Tasting & Silent Auction 


April 23 | Conservatorship, Guardianship, Probate & Trust Section 

20th Annual Probate & Trust Symposium 


April 24 | Res Ipsa Jokuitor XVIII 

Comedy Night & Kickoff for Food from the Bar 2013 


April 25 | Employment Section 

The Employment Tax Consequences of Settlements 

and Judgements 


April 29 - May 10 | CCCBA 

22nd Annual Food From the Bar 


May 2 | CCCBA 

Interprofessional Mixer - Springfest! 


May 9 | Appellate Section 

A Discussion with Justice Henry Needham 


May 10 | Employment Section 

Violence in the Workplace: Employer Obligations, 

Legal Issues and Threat Assessments 


May 15 | Business Law & Corporate Counsel Section | Litigation Section 

The Ever-Evolving Enigma of ESI (Electronically Stored 

Information) and Its Ethical Obligations 


For up-to-date information on programs, please visit www.cccba.org/attorney/calendar 

and/or subscribe to our weekly “Events & News” email. 

To subscribe, text CCCBA to 22828. 


March 12 | Alternative Dispute Resolution 

Section 

ADR Roundtable: Using ADR to 

Resolve Discovery Disputes 

This roundtable will be a wide ranging 

discussion of ways to use ADR to resolve 

Discovery and other pre-trial disputes short 

of a complete global settlement. 

Drinks and snacks will be provided. 

Speaker: Kenneth Strongman 

Time: 6 pm – 7:30 pm 

Location: San Ramon Center 

2010 Crow Canyon Place - 1st Fl. Conference 

Room, San Ramon 

MCLE: 1.5 hours general credit 

Cost: $10 for section members and law 

student members; $15 for CCCBA members; 

$20 for non-members 

Registration: Online at 

www.cccba.org/attorney/calendar 

More Info: Contact Theresa Hurley at 

(925) 370-2548 

March 15 | Real Estate Section 

Recent Developments for the Intersection 

Between Deeds of Trust and 

Article 3 of the Commercial Code 

Speakers: Marcus Brown 

Brian Gunn 

Time: 7:30 am – 9 am 

Location: Scott’s Seafood 

1333 N California Blvd., Walnut Creek 

MCLE: 1 hour general credit 

Cost: Free for section members; $5 for law 






(925) 370-2548 

March 15 | Family Law Section 

How Children’s Development and 

Sexual Behavior Impacts Custody 

Speakers: Rhonda Barovsky, LCSW, BCD 

Hon. Jill Fannin 

Carol George, PhD, Prof. of 

Psychology, Mills College 

Time: 1:15 pm – 4:45 pm 

Location: Contra Costa Country Club 

801 Golf Club Rd., Pleasant Hill 

MCLE: 3 hours general credit 

Cost: $75 for section, CIC and law student 

members; $100 for CCCBA members; $150 

for non-members 

Registration: Go to the Family Law website 

at www.familylawsectioncontracosta.org 

More Info: Contact Therese Bruce at 

(925) 930-6789 

36 

March 21 | Employment Section 

ERISA - Employment Retirement 

Income Securities Act Basics for 

Employment Law Practitioners 

Speaker: Ruth Silver Taube, Esq., Law Office 

of Silver & Taube 

Time: 12 pm – 1:15 pm 

Location: Massimo Ristorante 

1604 Locust St., Walnut Creek 








(925) 370-2548 

MARCH 2013 

April 10 | Family Law Section 

Social Security & Retirement - 

Effect on Spousal Support 

Time: 12 pm – 1:15 pm 

Location: Contra Costa Country Club 

801 Golf Club Rd., Pleasant Hill 





Registration: Go to the Family Law website 

at www.familylawsectioncontracosta.org 

More Info: Contact Therese Bruce at 

(925) 930-6789 

April 23 | Conservatorship, Guardianship, 

Probate & Trust Section 

20th Annual Probate & Trust Symposium, 

sponsored by Mechanics Bank 

Making the most of and avoiding the pitfalls 

of the new tax legislation. 

Registration: 11:45 am | Buffet Lunch: 12 pm 

Program: 1 pm - 2:45 pm 

Dessert Reception to follow 

Speaker: Samuel A. Donaldson, Prof. of Law, 

Georgia State University College 

of Law 

Time: 11:45 am – 2:45 pm 

Location: Lesher Center for the Arts 

1601 Civic Drive, Walnut Creek 

MCLE: 1.5 hours tax specialization credit 

(pending) 

Cost: $50 for section members; $25 for law 

student members; $60 for CCCBA members 

and non-members 




(925) 370-2548

April 25 | Employment Section 

The Employment Tax Consequences 

of Settlements and Judgements 

Speaker: William Hays Weissman, Esq., 

Littler Mendelson, P.C. 

Time: 8 am – 9:15 am 










(925) 370-2548 

April 29 - May 10 | CCCBA 

22nd Annual Food From the Bar 

Make a difference to the hungry people in 

Contra Costa County (and show those other 

law firms how generous your firm really is!) 

This year marks the 22nd Annual Food From 

the Bar drive benefitting the Food Bank 

of Contra Costa and Solano. This amazing 

organization provides food to over 132,000 

people EVERY MONTH in Contra Costa and 

Solano counties. 

The firm with the highest per capita figures 

in each category will receive an individual 

award for permanent display in their office. 

This year’s goal is $100,000 and 10,000 

pounds of food. We hope to break the 

$1,000,000 mark in cumulative FFTB donations 

this year. Do your part to feed the 

hungry in your area. Participate in Food From 

the Bar! 

Donate food from your computer with the 

Virtual Food Drive! Sign up online at 

www.foodbankccs.org/foodfromthebarcc. 

May 2 | CCCBA 

Interprofessional Mixer - Springfest! 

Come join attorneys, bankers, CPAs and real 

estate and financial professionals for an informal 

happy hour mixer. Get to know other 

trusted advisors. No host bar. 

Time: 5 pm – 7:30 pm 

Location: Pyramid Alehouse 

1410 Locust St., Walnut Creek 

Registration: Please RSVP online at 

http://ebhh.eventbrite.com 


(925) 370-2548 

May 9 | Appellate Section 

A Discussion with Justice Henry 

Needham 

Join First District Court of Appeal Justice 

Henry Needham and Appellate Practice Section 

Chair Gary A. Watt for a discussion on 

appellate practice, pitfalls and pet peeves. 

Speakers: Justice Henry E. Needham 

Gary A. Watt, Esq. 

Time: 12 pm – 1:15 pm 

Location: Archer Norris 

2033 N Main St. #800, Walnut Creek 

MCLE: 1 hour appellate law specialization 

credit (pending) 

Cost: $15 for section members; $25 for 

CCCBA members and non-members 




(925) 370-2548 

May 10 | Employment Section 

Violence in the Workplace: Employer 

Obligations, Legal Issues and Threat 

Assessments 

Speakers: James Cawood, Threat Assessment 

Expert, Factor One 

Thomas Klein, Esq., TKlein 

Associates, Inc. 

Moderators: Andrea Kelly Smethurst 

Shannon Walpole 

Time: 8 am – 9:15 am 










(925) 370-2548 

May 15 | Business Law & Corporate 

Counsel Section and Litigation Section 

The Ever-Evolving Enigma of ESI 

(Electronically Stored Information) 

and Its Ethical Obligations 

Program from 3:30 pm - 5:30 pm, Wine and 

Cheese reception to follow. Free parking 

validation offered. 

Speakers: Hon. Steve Austin 

Jonathan Redgrave, Esq. 

Kirk Pasich, Esq. 

Jeffrey Rabkin, Esq. 

Roger Brothers, Esq. 

Moderator: Linda DeBene, Esq. 

Location: JAMS Office Conference Room 

1255 Treat Blvd. #700, Walnut Creek 


1 hour legal ethics credit 

Cost: $30 CCCBA members; $35 for nonmembers 




WE WANT YOUR ARTICLES! 

We invite you to take the opportunity to get your articles published. 

Please take a look at our 2013 editorial calendar below 

for upcoming themes and deadlines. 

If you think of a timely, interesting article - write it and send it to us! 

We have editorial guidelines available on our website, 

at www.cccba.org/attorney/cclawyer 

CONTRA COSTA LAWYER 

2013 EDITORIAL CALENDAR 

Print issues are listed in bold, online-only issues in regular font. 

Themes are subject to change. Check our website for the most up-to-date information. 

ISSUE ARTICLE DEADLINE THEME 

April 2013 Mar 12, 2013 Employment Law 

May 2013 Apr 5, 2013 The Future of Law Practice 

June 2013 May 7, 2013 The Vacation Issue 

July 2013 June 3, 2013 Criminal Law 

August 2013 July 9, 2013 Women in Law 

September 2013 Aug 2, 2013 Real Estate 

October 2013 Sept 10, 2013 Our Cities 

November 2013 Oct 4, 2013 Bench/ Bar Issue 

December 2013 Nov 12, 2013 Pro Bono 

QUESTIONS? ARTICLE IDEAS? FEEDBACK? 

email contracostalawyer@cccba.org 

38 

MARCH 2013

Why YOU 

should make 

referrals to 

CCCBA’s 

LRIS 

• Our LRIS is the only State 

Bar certified & ABA approved 

lawyer referral 

service in our county • Our 

LRIS has been providing 

quality referrals as a public 

service since 1978 • 

LRIS panel attorneys are 

required to meet specific 

experience requirements 

as a prerequisite to joining 

the service • Every LRIS attorney 

is required to carry 

malpractice insurance • 

Our LRIS has an experienced, 

friendly and 

knowledgeable staff to 

assist you! 


Candice E. Stoddard 

1350 Treat Blvd., Suite 420 


Ingenuity 

Colleen is renown for understanding her 

clients' financial needs. Using ingenuity, 

and that understanding, she works hard 

to find the best solutions for you and your 

business. Her commitment exemplifies 

the personalized service for which 

Scott Valley Bank is known. 

Her 30 years of banking experience and 

Scott Valley Bank - now that is a powerful 

marriage of knowledge, experience, and 

the style of banking service you deserve. 

Candice E. Stoddard 

Personal Injury 

Real Estate Litigation 

Trust and Estate Disputes 

Mediation 

n 

925.942.5100 • fax 925.933.3801 

cstoddard@stoddardlaw.com 

Practicing law in the East Bay for over 25 years 

For more information, 

call LRIS Coordinator 

Barbara Arsedo 

at 925.370.2544 

Walnut Creek Office 

1500 N. California Blvd. • 925.944.0180 

Oakland • 1111 Broadway • 510.625.7850 

San Jose • 2001 Gateway Place • 408-573-7710 

scottvalleybank.com 

Colleen Benatar 

VP / Relationship Banker 

cpbenatar@scottvalleybank.com 

925.944.0180 ext. 215 


DIABLO 

VALLEY 

REPORTING 

SERVICES 

Certified Shorthand Reporters 

Serving the entire Bay Area 

• Deposition Reporting 

• Experienced Professional Reporters 

• Computerized Transcription 

• Deposition Suites Available 

• Expeditious Delivery 

• BART Accessible 

2121 N. California Blvd. 

Suite 310 


925.930.7388 

fax 925.935.6957 

dvrs2121@yahoo.com 

40 

MARCH 2013

download - Contra Costa County Bar Association

Create successful ePaper yourself

Delete template?

Save as template?