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When’s The Last Time Your PC or Server Got an Oil Change?

in Columns/Technology
Joe Balsarotti

By Joe Balsarotti is President of Software To Go

The quick lube places drummed the “three months or 3,000-mile” mantra into all of us some 20 years ago and built an industry around it. Later, autos with 100,000 miles were considered exceptions; now 200,000 miles and more is the norm. Any mechanic will tell you that regular preventative maintenance allows cars to last longer. Computers need constant maintenance, too. A network going down can be far more costly to your business than if a truck, van or car in your fleet malfunctions. After all, you can’t just call up Enterprise and rent a new network for a week.

Far too many businesses see their technology as simply a necessary expense rather than the asset it is. After all, how expensive would it be to do your bookkeeping by hand compared to the cost of merely plugging numbers into your accounting system? Computers, networks and the like should be treated as the integral part of your business that they are. Just like changing the oil in a car or greasing the gears of heavy machinery, regularly scheduled preventative maintenance results in saving money rather than costing your business money.

Computer technology changes constantly. A model year for a desktop computer is about four months; major application programs renew every one to three years. In the software realm, most programs are dependent upon other programs that very likely are produced by another company. One vendor finds a bug, a defect or an entry point for hackers and writes a patch or update to fix it. That, in turn, changes parameters in other programs that communicate with it, requiring updates. On the hardware side, printers, scanners, CNC, robotics, entry systems and other connected devices need software updates when the operating systems running on the PCs are updated. Security updates to anti-virus, endpoints and firewalls are conducted daily, if not hourly, behind the scenes.

All those updates and changes need to be managed by someone. We’ve seen many a business user’s system crash, only to discover that the software is two, three or even five years behind. Companies may unintentionally leave their operations vulnerable and accessible to any kid who searched for “hacking tools” on the Internet. A lack of preventive maintenance and monitoring – what our industry refers to as managed services – leads to unexpected and unpleasant future expenses.

Just last month we heard about the St. Louis Public Library’s entire network being rendered unusable as a Cryptolocker type of ransomware was downloaded and encrypted the data, holding it hostage. The patron machines and back-office machines never should have been on the same network in the first place, but I’m sure someone will argue that it was prohibitively expensive to do it the correct way. Oops. We’re left wondering how much that shortcut will cost taxpayers. Was the library paying for update subscriptions to its firewalls? Was all of the software completely updated and was the network being monitored for a mass change in data? At least we do know that St. Louis Public Library had backups of the data and didn’t pay the ransom.

How would your network fare if it were attacked in the same manner? What costs would your business incur if all computers were unusable for a week? Would the idea of preventative maintenance and monitoring suddenly look like a cheap insurance policy?

Gartner research back in 2010 showed that 43 percent of companies were immediately put out of business by a “major loss” of computer records – and that another 51 percent of businesses studied permanently closed their doors within two years, leaving a mere 6 percent survival rate.

Maybe many of those data losses were caused by a major disaster destroying the surrounding customer base, as one possible example. But ask yourself: even if these are extra harsh statistics, what happens if you lose your customer list, your A/R report and aging, blueprints, plans or schematics for all the projects on which you are working? Realistically, would your business survive, and at what cost? More importantly, could it have been prevented by spending a realistic amount of money on managed service and preventative maintenance?

Most managed service plans are flat monthly, quarterly or annual fees based upon either the number of users or devices in the business. Your business gets the advantage of peace of mind that your tech provider’s incentive is to prevent problems because repair and remediation takes more time and is therefore less profitable. Additionally, your business gains a far better grasp on the true expenses of your technology because you can forecast and budget far in advance – and you can hopefully eliminate the unexpected, immediate expenses that failures bring.

I welcome your questions or comments at businesstech@software-to-go.com.

Joe Balsarotti is President of Software To Go and is a 37-year veteran of the computer industry, reaching back to the days of the Apple II. Balsarotti served three terms as chairman of the National Federation of Independent Business’ (NFIB) Missouri Leadership Council, as chairman of the Clayton, Missouri Merchant Association for a dozen years, chaired Region VII of the Federal Small Business Regulatory Fairness Board and currently serves on the Advisory Panel of the ASCII Group, an organization of more than 1,000 independent computer and technology solution providers in North America.

Consider Lying to Make Your Personal and Business Data More Secure

in Columns/Technology
Joe Balsarotti

I’ve written about it before, security breaches allow access to personal data. No business is safe. When the ‘big guys’ get hit, it makes the evening news. When it happens to a small business or an individual, it can still be devastating.

The recent Yahoo hack exposed one billion accounts. That’s one-thousand-million users who got their data stolen. What’s really bad about this second exposure at Yahoo is that not only did user names and passwords get out, but also those security question answers. Oops.

With that in mind, here are some tips on how to make your data and your business’s more secure.

In my opinion, the whole idea of a security question as a way to recover forgotten passwords or accounts is just plain stupid. As Sarah Palin found out during the 2008 elections, just about anyone can find out enough about you to answer the questions usually asked and sure enough, her email account was hacked. Which, of course, means that just about anyone can get your data.

So, what can you do about it?  Lie.

Yes, lie when you enter answers to security questions. If the vendor asks for your high school, enter your college. Enter your father’s middle name when asked for your mother’s, etc. The trick, obviously, is to be consistent so you don’t trip yourself up. You might even consider entering the first of your birth month as your birth date, for example, when registering with most sites. After all, you will still get your free birthday desert at the local restaurant if you keep the month correct but might save yourself grief if the restaurant rewards program gets hacked and your birthday gets out.

The ‘keep it simple’ premise can be utilized in your business. Don’t ask your staff, your vendors or your customers for data that you really don’t need. Remember, once you have that data, its safety is the responsibility of your company. That also means the liability for a breach is on your company as well. Maybe your marketing people say sending a birthday greeting or your sales staff knowing a customer’s anniversary is a plus, but does it really matter if you know the exact day? Would more general data serve the same purpose with lower risk?

Remember, the adage of ‘change your passwords frequently’ is not to protect you, the customer, it is to protect the ones holding that data. Obviously, the best security is to come up with a password very hard for someone else to figure out, but that you can memorize. Constantly changing passwords, do the opposite. People forget them because the most secure and meaningful ones have already been used. Therefore their passwords become simpler and simpler and in most cases end up written down on Post It notes, where a cleaning crew, employees, visitors, or family can easily see them.

The reason password changes are crammed down your throat is due to a valid worry that the data holder may have already been breached and doesn’t know it. Changing the passwords regularly renders the stolen data useless, which does protect you, but it’s really done as an attempt to reduce the holder’s liability.

One way to protect yourself with regards to frequent password changes is to come up with some formula only you know which allows a memorizable password, but also makes it unique at every place you use it.  For example, say you decide your ‘master password’ will be the word “memory”. If you have a Yahoo account, make the password “1Memory1-Y”, for a Gmail account, your password would become “1Memory1-G” and for online banking it would become “1Memory1-B”.   In this way, you’ve kept the basic password as something you can remember and not have to write down, it includes letters of both upper and lower case, numbers (not just tacked onto the end) and a symbol, all things that are required by most sites nowadays. You’ve already figured out the last letter is the first of the site, but when hackers try your data at a host of well-known websites, it will fail. They are not going to analyze your individual password for a pattern. They are already onto trying the next million easy targets in their list.

Turning to the business side of the equation, customer data stored on your systems should always be secured with multiple levels of security, which include hardware firewalls, passwords (or better yet, biometrics), endpoint protection, and security training for your staff. All security products should have update subscriptions and only administrators should have access to install software. Every user should have their own unique passwords and your employee manual should make clear that sharing passwords, or using another’s account could be a fireable offense. Don’t ask security questions of your customers. Instead consider having them enter a second phrase, which only makes sense to them, but not one based on a question which could be obtained by a hacker.

Having your personal data stolen is bad, but losing your company because someone stole all your employee or customer data is worse. Take the necessary precautions and consider protecting yourself with a couple little white lies.

I welcome your questions or comments at businesstech@software-to-go.com.

Joe Balsarotti is President of Software To Go and is a 37-year veteran of the computer industry, reaching back to the days of the Apple II. Joe, served three terms as chairman of the National Federation of Independent Business’ (NFIB) Missouri Leadership Council, as chairman of the Clayton, Missouri, Merchant Association for a dozen years, chaired Region VII of the Federal Small Business Regulatory Fairness Board, and currently serves on the Advisory Panel of the ASCII Group, an organization of over 1000 independent computer and technology solution providers in North America.

Missouri’s Supreme Court Reverses $8,000,000 Punitive Damage Verdict

in Columns/Law
James R. Keller

By James R. Keller

Missouri’s Supreme Court weighed in on another construction case in 2016 by a reversing a jury verdict in favor of the City of Harrisonville of $8,000,000 in punitive damages.

The case is City of Harrisonville v. McCall Service Stations d/b/a Big Tank Oil and the Missouri Petroleum Storage Tank Insurance Fund, 495 S.W.3d 738 (Mo. 2016), decided August 23.

The project was the cleanup from underground petroleum storage tanks at a service station in Harrisonville. An upgrade of an adjacent sewer system for the City prompted the cleanup.

Missouri, by statute, established the Missouri Petroleum Storage Tank Insurance Fund per Section 319.129. This Fund provides insurance to service station owners for the cleanup costs from spills and leaks from underground petroleum storage tanks.

McCall Service Stations d/b/a Big Tank Oil owned a service station. McCall informed the Fund in 1997 that significant gasoline had leaked into the soil around its tank system.

McCall and the Fund hired Bob Fine, an environmental engineer, to determine the extent of the leak. Fine notified the Missouri Department of Natural Resources that the leak was moving toward a nearby creek.

Fine prepared a plan to contain the leak by installing monitoring wells on streets next to the site. McCall thereafter sold the service station to Fleming Petroleum Corporation.

In 2003, Harrisonville decided to upgrade its sewer system given a growth in population. The City awarded a construction contract, after competitive bidding, to Rose-Lan Construction for a multi-million dollar sewer upgrade per a bond issue for this work.

During construction, Rose-Lan encountered contaminated soil next to Fleming’s service station and notified the Department of Natural Resources.

Fine, who had been monitoring the situation since 1997, confirmed that the underground storage tank was the source of the leak. He suggested that the most cost-effective approach would be to leave the contaminated soil in place and install petroleum-resistant pipe and fittings.

The City’s engineer estimated that to completely remove and replace the contaminated soil would cost more than $500,000. BV Construction submitted a bid of $190,226.38 to install the petroleum-resistant pipe per Fine’s approach.

The Fund obtained a lower bid of $175,161.41 from Midwest Remediation.

There were several discussions between the City and the Fund about the remediation and who would pay for it. Three representatives for the City felt based on the meetings that the Fund would reimburse the City for the remediation costs.

After these discussions, the City’s attorney sent a letter to the Fund’s representative that the City was going forward with Midwest in reliance on the “promise” that the Fund would pay the full amount of Midwest Remediation’s costs. The City then authorized Rose-Lan to subcontract with Midwest Remediation to install the petroleum-resistant pipe.

The Fund did not reimburse the City for the work—thus the lawsuit.

The City sued the Fund for fraudulent and negligent misrepresentation.  The City alleged it hired Midwest Remediation in reliance of the Fund’s representative’s express promise that the Fund would pay for the cost of Midwest’s work.

During trial, the City established that it incurred increased costs of $172,100.98 to complete the sewer upgrade project as a direct result of the contamination caused by McCall and Fleming. None of these costs would have been incurred had the City not encountered petroleum-contaminated soil.

The jury returned a verdict for the City of $172,100.98 in compensatory damages against McCall, Fleming and the Fund, $100 in punitive damages against McCall and Fleming and $8,000,000 in punitive damages against the Fund.

Regarding the Fund’s liability, Section 319.131 states that the Fund will pay all of any participants’ cleanup costs that are greater than $10,000 but less than $1,000,000 per occurrence and the Fund shall provide coverage for third-party claims involving property damage or bodily injury caused by leaking petroleum storage tanks.

The Missouri Supreme Court decided the City’s claims against the Fund did not fall within the statutorily authorized claims set out in Section 319.131.  The Fund is not authorized to provide coverage for claims that do not constitute a participant’s cleanup costs or involve third-party claims. The City’s tort claims were beyond the coverage provided by the Fund.

Despite this finding, the Supreme Court left in place the award of compensatory damages solely because the Fund had not appealed this portion of the jury’s verdict.

But the Supreme Court decided that since the City did not have a claim against the Fund for compensatory damages, even though they were awarded, the City could not recover punitive damages from the Fund.

There must first be actual damages to support the award of punitive damages.  Since the actual damages were not allowed by statute, the punitive damages could not be allowed either, the high court concluded. Thus, the Supreme Court reversed the $8,000,000 punitive damage award.

James R. Keller is a partner at Herzog Crebs LLP where he concentrates his practice on construction law, complex business disputes, real estate and ADR.  He also is an arbitrator and a mediator.

Don’t Accept the Slow Season

in Sales
Tom Woodcock
Tom Woodcock

By Tom Woodcock

Winter is approaching. Work conditions will decline, ground will harden and everyone goes from holiday mode to winter blah. No one is spending any money and projects are scarce. Time to hold your breath and ride your line of credit through this annual recession.

Not so fast!

Throwing in the towel before the season even changes is awfully defeatist. The real course of action is to dig down deep and drive your sales effort. Opportunity may slow down, but it doesn’t disappear.

I’ve worked with enough contractors to know the difference between those that thrive through the winter and those who starve. The firms that go hungry are those that resign themselves to the norm and do nothing to move the bar. The true winners are those that look for every sales vehicle possible to get in front of the customer base therefore, opportunity. They gain a presence physically, electronically, and proactively. They’re not sitting by the phone waiting for it to ring or surfing the Internet for hours at a time. They understand that it takes work to find the projects that break over the winter. Not just those that bid this time of year, but also those that begin.

There is always pressure to go with the historical processes that the construction industry has sustained. Get fat over spring and summer then hibernate over the winter.

I refuse to let my clients accept this logic. We sit down and develop aggressive sales schedules and implement them. We keep the company accountable and review the results. Areas that we feel are the most likely to produce opportunity get the greatest sales attention. We then attack from a selling perspective and don’t let up. These opportunities may take more face-to0face customer time but often we’re the only ones actively pursuing them. This presents a great opportunity to steal a regular customer from a competitor.

Most people think that when they are actively engaged with a customer on a project, they’re selling. Not true. That’s servicing.

It’s what you do with customers when there isn’t a project on the table that falls into the sales category. It’s easy to communicate with a customer in the middle of a summer project. There are details to cover and schedules to meet. That’s a main component of a contractor servicing their client. It’s much more difficult to communicate when you’re not reviewing those elements, to actually talk to your customer on another level. Because of that difficulty, few people actually do it.

So this is the scenario: few people are actively calling on customers, you have time, and projects exist. Seems like an ideal situation for securing some business.

The challenge is to have the discipline and the plan to go after it. The first step is eliminating the “slow season” mentality. I’m not sure about you, but I prefer to be busy year-round. It can make sales projections easier and growth more possible when you gain business every month of the year instead of just nine.

Once this becomes part of your sales program, it tends to grow stronger year after year. You begin to recognize the vertical markets that produce opportunity during the winter months. You can then continue to develop your approach and marketing efforts to capitalize on the seasonal opportunities.

It is kind of like landscaping in the spring and summer and plowing snow in the winter, a common practice in property maintenance. Translation in construction terms: ground up in the spring and summer then renovation in the winter. That is just an example.

You can superimpose that formula on almost any construction trade of dynamic, if you’re willing to. That’s the rub. It’s easier to simply ignore this opportunity and kick back. Some see it as a time to catch their breath business wise. In reality, it’s more like holding your breath.

Investigating which market segments are progressing indicate where projects exist. Developing a sales approach to those markets and enacting it can unveil opportunities. Few people do this kind of sales work in the proverbial slow season.

The size of your company is irrelevant if you truly prioritize the sales effort. Breaking the trend is the most difficult part in conjunction with extending patience till results begin to occur. Selling is never a situation where you simply snap your fingers and the business magically appears. It requires planning, effort, and diligence, especially in a season that traditionally is not productive.

Anyone can secure business when there’s plenty for everyone. The real sales professionals secure it during the leaner times. When the bit players disappear and the field opens up, more commonly known as the Slow Season!

Tom Woodcock, president, seal the deal, is a speaker and trainer to the construction industry nationwide. He can be reached at his website: www.tomwoodcocksealthedeal.com or at 314-775-9217.

 

Subcontractor Denied Bond Claim Against St. Louis County

in Law

By James R. Keller

James R. Keller
James R. Keller

The Supreme Court of Missouri recently ruled that a subcontractor cannot pursue a bond claim against St. Louis County, but may pursue its mechanic’s lien claim against the leasehold interest of a company that acted as St. Louis County’s agent. The Missouri Supreme Court rarely decides construction cases involving bonds and mechanic’s liens, making this decision significant in how subcontractors will pursue future claims.

The case is Brentwood Glass Company v. Pal’s Glass Service, Inc., Clayco, Inc., Cornerstone VI, LLC, St. Louis County, National City Bank of the Midwest, N.A., Paul M. Macon, UMB Bank, N.A. and Victor Zarilli, 2016 WL 4444039, decided August 23.

St. Louis County had purchased property known as Six CityPlace Drive in Creve Coeur, Missouri, which the County had planned to develop as the headquarters of Smurfit-Stone Container Enterprises, Inc.

The County entered into a contract with Cornerstone to construct the project on the County’s behalf. Cornerstone acted as the County’s agent.

Clayco, Inc. was the general contractor for the project. Clayco entered into a subcontract with Pal’s Glass to supply glass and glazing work. Pal’s Glass entered into a sub-subcontract with Brentwood Glass for some of this work.

No contractor on the project obtained a bond that would comply with Section 107.170.2 of the Revised Statutes of Missouri. This section provides that all public entities (such as St. Louis County) must require every contractor for work on public property to furnish a bond to cover materials and labor.

Brentwood Glass filed a mechanic’s lien on the property in the amount of $1,061,464.08. Brentwood Glass then filed a nine-count petition against Pal’s Glass, Clayco, Cornerstone, St. Louis County, as well as various banks and individuals, seeking recovery on its mechanic’s lien and in one count pursuing an action against St. Louis County for its alleged failure to require a payment bond under Section 107.170.

Pal’s Glass admitted it owed $593,261.47. It consented to a judgment for that amount plus costs.

Because the property was owned by St. Louis County at the time Brentwood Glass began working on the building, Brentwood Glass could not pursue its mechanic’s lien against the County. Public property is not subject to a mechanic’s lien.

Cornerstone, however, held a leasehold interest in the property. Cornerstone is a private company and not a public entity.

The Supreme Court reversed the decision of the trial court and found that Brentwood Glass could pursue its mechanic’s lien against Cornerstone’s leasehold interest. The Supreme Court of Missouri sent back for further consideration by the trial court whether Brentwood Glass’s lien statement properly complied with Missouri law, which requires a “just and true” account of any money that is due.

The lien statement included potentially non-lienable items. Brentwood Glass admitted that its statement incorrectly included efforts to recover for payments that Clayco had paid directly to Brentwood Glass’s subcontractors and material suppliers.

The Missouri Supreme Court determined that the trial court must decide whether these non-lienable items were included in the lien statement with an intent to defraud or were honest mistakes. If honest mistakes, presumably the trial court will determine that the mechanic’s lien is proper.

Regarding the public bond claim against St. Louis County, Section 107.170.1 requires a bond for any “contractor” that “provides construction services under contract to a public entity,” but not a party that merely arranges for such services to be provided by others. The Supreme Court decided that Cornerstone did not provide construction services under its contract with the County. Therefore, Cornerstone was not a contractor within the meaning of Section 107.170.1.

The Supreme Court of Missouri also decided that even if this section required a bond, Brentwood Glass’s claim must fail because it did not name as a party in its lawsuit any individual officials of St. Louis County, but instead named as the defendant only St. Louis County. The court held:  “The decisive fact is that the County—a political subdivision—is immune from suit under the doctrine of sovereign immunity.”

The Missouri Supreme Court’s decision was far from unanimous. Two of the Justices, including the Chief Justice, filed concurring/dissenting opinions.  They believed that Cornerstone was a contractor within the meaning of the statute and therefore Brentwood Glass should have been able to pursue its bond claim. They also believed that Brentwood Glass should have been given the opportunity when the case is sent back to the trial court to amend its petition to name individual officials as defendants.

Three other Justices filed a different concurring/dissenting opinion. They believed that Brentwood Glass did not demonstrate substantial compliance with Missouri’s mechanic’s lien statute that requires a “just and true account.”  These three Justices believed that Brentwood Glass should not have been allowed to pursue its mechanic’s lien claim.

James R. Keller is a partner at Herzog Crebs LLP where he concentrates his practice on construction law, complex business disputes, real estate and ADR.  He also is an arbitrator and a mediator.

 

True Sales Support

in Columns/Sales
Tom Woodcock
Tom Woodcock

By Tom Woodcock

I understand sales personnel need to be as accurate as possible before moving transactions to sales support. The better the information on the front end, the better the support effort on the back. With that being said, true sales support is tough to find.

The sales process may vary from company to company or product to product, but each sale has a process. Securing the customer and landing the deal are only the first steps. In construction, there are many additional facets to the sales transaction, any one of which can make or break the transaction.

Efficiency in the sales process directly relates to the customer experience and success rate of the corporate sales effort. Don’t let paperwork, material ordering, or communication with subcontractors interrupt the project or sales schedule. Not keeping the customer first lets details get bogged down in procedures or red tape. Throw a dose of company politics, mixed with mutual disrespect between sales and administration, and a mess develops. This can cause customers dissatisfaction and frustration, which often ripens into negative reviews and lack of referrals. Perish the thought of ever getting another project if that customer has recurring business.

Many companies have brought me in to help generate greater business volume. They want a full backlog of work at great margins. They tend to feel their front end sales approach is the problem. Often, I find their sales process is lacking or broken. There is no sense of urgency, little initiative to help the selling party and often resistance to sales if the documentation isn’t perfect. Whether it’s an issue of control, lack of understanding of the customer’s experience, or a perceived respect problem, the customer takes the hit. This can manifest in delays or cost overruns.

Support personnel need to understand that securing business in a sales environment is the most important aspect of any business. No sales, no paper. Not that their position isn’t critical, but those charged with getting business are there to do just that. Internal support networks are built to do just that, support. They end up making the sales agent look like a rock star, or incompetent.

The reinforcement of the commitments made by the sales rep goes a long way towards the establishment of the company’s credibility. By counteracting the sales person’s commitments, they send the customer the message that the rep is less than genuine and the company is inefficient.

I’m very aware of the fact that many sales agents promise the impossible, but that’s a different topic. Doing everything that you can to meet the customer’s expectations, if at all possible, is the essence of great sales support. The easy thing to do is to not perform and then blame the sales individual. That may be accurate, but it’s not optimum for the company.

I’ve mediated many battles between sales and support, some of them pretty nasty situations. Mutual understanding and respect for each party’s role in the sales process closes the gap between them. Good communication back and forth, verbally if feasible, clears up discrepancies. Avoiding condescending tones, venting, and blaming shows a higher level of business maturity. Few companies take the time to cultivate this type of environment. They let these internal relationships develop organically hoping for the best. Rarely do they end up with the result they hoped for.

Merely stating that you need cohesion between sales and support isn’t enough. It’s a daily practice that needs to be nurtured and reinforced. Ignoring a problem can result in delayed transactions, disgruntled employees, and loss of personnel, all of which are detrimental to a strong sales effort. Investing in training on the internal customer for sales personnel and the critical aspect of sales for the support personnel can bring an awareness of each party’s role.

Companies that work to develop the relationship between sales and support end up with a smooth flowing machine. They achieve a higher standard and set the bar high for competitors. This all takes self-evaluation and effort to be successful. Companies willing to practice this development will enjoy the fruits of it: high morale, extra effort, and increased revenue. Not to mention the value it brings to customers.

The reasons are critical. Gaining separation from the competition is not just the result of value, which is what is often taught. It is also the culmination of team effort, a value proposition rarely taught and seldom seen. The greater the customer experience front to back, the greater the value they perceive. This can reduce competitive influence and breed loyalty.

True sales support is simply part of a more profitable equation. The alternative can only result in more price competition and number shopping. Usually, contractors blame the customer for this behavior. In reality, looking internally may be the solution. Interesting to realize that the way we interact with one another in the sales process is so influential on the sales success of our companies.

Tom Woodcock, president, seal the deal, is a speaker and trainer to the construction industry nationwide. He can be reached at his website: www.tomwoodcocksealthedeal.com or at 314-775-9217.

The Sun Does Not Shine on Homeowner’s Solar Panels

in Columns/Law
James R. Keller
James R. Keller

By James R. Keller

After three trials and one appeal, a homeowner must remove part of its solar panel system, because the homeowners’ association did not approve it, and pay up to $56,000 in attorney fees to the association.

The case is The Lake at Twelve Oaks Home Association, Inc. v. Hausman, 2016 WL 1579124 (W.D. Mo. April 19, 2016).

In July 2012, Matthew and Stacy Hausman installed a photovoltaic solar array system on various roofs and on the ground of their home, which is located within a subdivision in St. Joseph, MO.  The subdivision was part of The Lake at Twelve Oaks Homes Association, Inc. Homeowners were subject to a declaration of covenants, conditions and restrictions for the subdivision.

One of the restrictions was that homeowners must submit written plans and specifications and obtain written permission from the Association’s Design Review Committee (DRC) prior to construction of any structure that materially changed the exterior appearance of that homeowner’s property. The Hausmans did not submit anything to the DRC.  Ironically, Matthew Hausman was a member of the DRC.

The Association demanded that the Hausmans remove the solar array as being in violation of the restrictions of the subdivision. The Hausmans did not remove the system. The Association filed a lawsuit seeking a permanent injunction.

In the first trial, the judge ordered the Hausmans to present their plans for the solar array system to the DRC for its review and approval in total, in part or not at all.

Shortly thereafter, the St. Joseph City Council enacted an amendment to its zoning ordinances regarding solar energy systems within the city limits.  It provided in part that no homeowner’s agreement could be more restrictive than the new city ordinance.

The DRC approved the portion of the system installed on the rear roof but rejected the portion of the system that included the panels installed on the side roof of the garage and the ground-mounted panels on the south side of the garage. The DRC’s decision was based on a provision within the Solar Guidelines previously adopted by the DRC that required panels to be constructed only within a fenced yard or patio at the rear of the main structure.

The DRC also based its decision on how the solar panels affected the character of the subdivision and considered individual homeowner complaints plus compatibility with surrounding properties and impact on the value of subdivision homes.

After a second trial, the court ordered the Hausmans, consistent with the DRC decision, to remove the part of the solar array system erected on the garage and the ground-mounted panels on the south side of the garage.

The trial court then set aside its own judgment, deciding that the parties should have included the city as an indispensable party given its new ordinance on solar panels.

After a third trial, the trial court again found in favor of the Association and ordered the Hausmans to remove the solar arrays not approved by the DRC. The court also determined that the city’s solar ordinances could not be applied retroactively to the Association’s Solar Guidelines and further found that the DRC’s decision was reasonable.

Finally, the trial court awarded attorney fees (provided in the subdivision declarations) to the Association.

The Hausmans argued on appeal that the trial court erred in upholding the DRC’s decision as being reasonable. They argued that sale prices for homes in the subdivision actually increased after the solar panels were installed.

By contrast, the DRC chair testified at trial that most members of the DRC did not find the solar energy system to be esthetically pleasing.  He further testified that the Association had received complaints from approximately 20 neighbors who expressed negative views regarding the appearance of the solar system and concern that its installation lowered the value of surrounding properties.

The Hausmans’ former next-door neighbor testified that the glare from the solar panels focused on his property four to five hours a day.  He further testified that he made $20,000 in concessions in the sale price of his home due to the negative impact of the solar system.

Another neighbor who lives in the home across the street from the Hausmans testified that the glare from the panels during the evening penetrated into his front window and negatively affected the value of his home.

The appellate court discounted evidence from the Hausmans that the DRC had approved a solar array system of another homeowner in the subdivision and thus by denying the Hausmans’ system the DRC had acted in an arbitrary and capricious manner. The Western District noted that the system for this other homeowner could not be seen by anyone and that there were no complaints from the neighbors.

James R. Keller is a partner at Herzog Crebs LLP where he concentrates his practice on construction law, complex business disputes, real estate and ADR.  He also is an arbitrator and a mediator.

Are You and Your Company Suffering from Data Overload?

in Columns/Technology
Joe Balsarotti
Joe Balsarotti

By Joe Balsarotti

The amount of data on the Internet is staggering. Back in 2011, USC researchers estimated humans had already stored 295 billion gigabytes, and here I am adding to the total with this column. Here in 2016, tweets rack up at a rate of about 6000 every second. While I write this, there are over a billion separate websites, with over 3.89 billion pages (You can see the ‘size of the Internet’ change in real-time at http://www.worldwidewebsize.com/)

You’re wondering how this makes any difference to your business. The statistics above are interesting, but here’s the one that brings it home. Every second of every day, more than 2,000,000 emails are sent. How many are unread in YOUR inbox?

Data overload is happening to everyone. We’re inundated in emails, tweets, Facebook posts, pins, and a host of other calls for attention. Technology has not, as of yet, developed the solution for keeping up with it all, namely the 25th, 26th and 27th hour of the day. Since those extra hours aren’t here, yet, although I keep trying to invent them, how can one manage the time consumed by both ‘good’ emails and time wasters?

First off, use more than one email address. Yes, more makes for simplicity. Use a Yahoo, Gmail of other ‘freebee’ email service for all those companies who send newsletters, sale fliers, blogs, and the like. Using something completely divorced from your primary work email address (which should NOT be your primary personal email address) gets right at the heart of the problem. When you have spare time, go to the freebee email portal and dig in. DO NOT have that address automatically sent to your phone, Outlook, Thunderbird or whatever you view normal emails with. There needs to be a barrier between that type of email and your business and personal correspondence.

After you have that general email address set up take an afternoon, subscribe only to the ones you want (times do change and your sign ups from 2005 may not be relevant anymore) at that new address. As soon as you do, unsubscribe from those lists on your ‘real’ email address. Use this opportunity to clean house and make your days easier.

Now, back to my pithy comment above, if you are using the same address for work and personal emails, time to split those up too. It’s fine to have those two addresses hitting your phone and computer, but when you await an important message about your child, you don’t want it mixed in with work and when that contract comes in, you shouldn’t need to sort through PTA emails to find it.

Next, use the power of the computer and the software you paid for. Create folders for general topics you deal with, be it your kid’s soccer team, church group, purchase orders, legal docs, etc. There’s no need to go hog wild with fifty folders when ten will do, but make those ten folders reflect topics you can easily prioritize on a hectic day. If a deadline is nearing, go straight for that project folder instead of having to sift through dozens of messages irrelevant to getting the job done on time.

Lastly, set rules for the incoming emails, this may be a time when you need your tech staff to assist you. When the sender is a subcontractor, have Outlook dump that email immediately into the folder for them, or for the project they are working on. If the sender is your child’s school, into the folder for that child it goes. Vendor invoices or correspondence goes into the vendor folder, then maybe a sub-folder for just them. What you have to learn to do is look at the folders for the highlight or number denoting new messages, rather than the inbox. In this way, you immediately know the topics of many of your incoming emails and can prioritize with just a glance.

Start with very general folders and rules and refine them as you become comfortable with the new ‘normal’. If do it correctly, you can deal with 200-400 emails a day (as I get) and still have time for lunch. Now, if only you can get your staff to do the same thing …

I welcome your questions or comments at businesstech@software-to-go.com

Joe Balsarotti, president of Software To Go, is a 36-year veteran of the computer industry, reaching back to the days of the Apple II. He served three terms as chairman of the National Federation of Independent Business’ (NFIB) Missouri Leadership Council, was chairman of the Clayton, Missouri, Merchant Association for a dozen years, chaired Region VII of the Federal Small Business Regulatory Fairness Board, and currently serves on the Dealer Advisory Panel of the ASCII Group, an organization of over 1000 independent computer and technology solution providers in North America.

Reducing Risk in the Internet Age

in Technology
Joe Balsarotti
Joe Balsarotti

By Joe Balsarotti

Seems every tech article nowadays is about the liabilities of technology. Hacking, lost data, damaged online reputations, and the legal and ethical ramifications of technology and stored data.

So, it seems appropriate to delve into how to, if not minimize, at least mitigate the liabilities that the digital world has created for all businesses large and small.

Does your business host its own website?

Unless you have private components to yours site for vendors or customers to access your database, there is no reason to host your own site. Cutting off that entry point to your network goes a long way in reducing your risk. Besides, except for keeping internal I.T. people busy, there’s not much upside in hosting your own website. Outsource it to professionals after you’ve done due diligence to make sure there are backups, redundant sites, and uptime guarantees. In short, let specialists deal with it.

How about email, why would you host your own?

Forget the security concerns for a moment. Since over 95 percent of all email transmitted gets rejected at the server as spam, that means that 95 percent of the Internet ‘pipe’ you are paying for is wasted on trash. Find a reputable provider whose focus is on providing email.  After all, there are very few individual businesses with access to datacenters across the country for redundancy, battery and generator backup, communication lines from multiple providers, and 24/7 staffing, but quality email providers do.

Granted, going with one of the ‘big guys’ for email or hosted Exchange has its own set of issues as they are larger targets to hackers. If someone breaches your in-house email server, however, you don’t really have recourse, but if a multimillion or billion dollar provider gets breached, they will have far more resources to bring to bear on restoring service and recovering damaged or lost data. Plus, it’s a fair bet that lawyers will be lined up to help you recover compensation for any losses you suffer.

Passwords, remember them?

One of the easiest ways to minimize liability with technology doesn’t cost a penny, but it is essential. ANY notebook, phone, tablet, or home PC that can access your company and/or customer data must always be password protected and should lock if unattended.

When replacing old PCs and servers, businesses generally know to keep the hard drives or get a certificate of destruction. However, the same precaution goes for those tablets or phones. Getting a couple bucks for trading in an old phone or tablet turns into a really bad deal when the tablet or phone falls into the hands of foreign hackers and organized crime, who buy old electronics by the pallet, looking for data off of hard drives.

Save yourself some headaches and reduce your company’s risk in the digital world by getting a certificate of destruction for every device that you dispose of.

I welcome your questions or comments at businesstech@software-to-go.com

Joe Balsarotti is president of Software To Go and is a 35-year veteran of the computer industry, starting back in the days of the Apple II. He served three terms as chairman of the National Federation of Independent Business’ (NFIB) Missouri Leadership Council. He was chairman of the Clayton, Missouri Merchant Association for a dozen years, chaired Region VII of the Federal Small Business Regulatory Fairness Board and currently serves on the Dealer Advisory Panel of the ASCII Group, an organization of over 1000 independent computer and technology solution providers in North America.

What Do You Mean Our Data’s Gone?!?

in Columns/Technology
Joe Balsarotti
Joe Balsarotti

By Joe Balsarotti. Software To Go

A web-hosting firm we deal with had a disaster recently. The initial problem was beyond their control, then that irritating thing we call ‘human error’ came into play and made a minor disruption into a weeklong catastrophe for its customers.

This brought to light a glaring weakness in most business’ digital disaster plans (assuming the business even has a disaster plan)— their websites. Even if your website is just a glorified brochure for your services instead of a full-blown e-commerce site, you did pay money to have it designed. Ask yourself: who has a backup copy of it? Are you trusting that the hosting company has backups? In the case I mentioned, they did, but they weren’t enough. Maybe you assume the PR firm / web designer / programmer who built your site has backups of it, but they probably do not.

There may be an initial copy of the site as you first had it made, but then over the months and years, you had revisions made to it. Your offerings may have changed, the contact names of your staff as they come and go, graphics, and descriptions all probably morphed as time moved on. (If they haven’t, then your website is in desperate need of a rework) That original copy is now as usable as a faded roll of thermal fax paper.

How many of you have contracted with a backup service for your website? Along with that, how many of you have contracted for an archive of all those years of email for not only you, but for all current and past staff? Are you trusting the first marketing piece a prospect will ever see to someone somewhere in ‘The Cloud,’ who you think/hope/pray is backing it up?

How damaging would it be to your business to have customers and prospects see a blank screen when they expect your website? What goes through their mind when the email they sent you gets returned as undeliverable, not-found, or, even worse, is never acknowledged? All the money you spent on advertising, marketing, and web design all goes for naught in the case of a failure like that.

Email archiving is standard practice in some industries, such as financial, but for most it’s never given a thought as everyone thinks the email company “takes care of that”… right? Well, no. Sure email providers and web hosts probably make backups, but in a world where viruses can sit dormant on systems for weeks or months and then trigger without warning, what good is a backup from last week? That backup is infected too. What happens if the server hosting your website is in a building damaged by a fire, flood, earthquake, or tornado and the backup drive was sitting right next to the server?

The ‘how’ of the failure isn’t the important part of this story, in the end, enormous sums of time, energy and money were thrown at the problem by the hosting firm and the data center they utilized and eventually the customer websites were online again, but with a loss of a week and some irretrievable data. Then again, not all providers would go to the extremes this particular one did to make their customers whole again.

The moral of this story is to make sure you have automatic backups and archiving in place for not just your PCs and servers, but for everything you have in the Cloud, as well. Trusting your company’s lifeblood, its data, to just one provider is a bad plan. Put a backup in place separate from your primary vendor. It’s no doubt the cheapest ‘insurance policy’ your company will ever purchase.

I welcome your questions or comments at businesstech@software-to-go.com

Joe Balsarotti is President of Software To Go and is a 36-year veteran of the computer industry, reaching back to the days of the Apple II. He served three terms as chairman of the National Federation of Independent Business’ (NFIB) Missouri Leadership Council. He was chairman of the Clayton, Missouri Merchant Association for a dozen years. He chaired Region VII of the Federal Small Business Regulatory Fairness Board and currently serves on the Dealer Advisory Panel of the ASCII Group, an organization of over 1000 independent computer and technology solution providers in North America.

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